what is sg&a

SG&A stands for Selling, General, and Administrative Expenses, which is a major non-production cost presented in an income statement. It includes all non-production expenses incurred by a company in any given period, such as rent, advertising, marketing, accounting, litigation, travel, meals, management salaries, bonuses, and more. SG&A reflects the non-production, everyday expenses of running a business, such as costs to promote, sell, and deliver its products and services, as well as to manage day-to-day operations. SG&A expenses are sometimes referred to as period costs since they relate to the time period in which they are incurred, and they do not relate directly to production. SG&A is part of a company’s operating expenses, and some companies, especially smaller firms, use the terms SG&A and operating expenses interchangeably. However, U.S. accounting standards treat research and development costs as a separate operating expense that’s not part of SG&A. Depreciation is typically reported as a separate line item within operating expenses, too.