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Accounting Treatment of amount paid to Consulting Company for Restructuring HR policies

Mateen Khan's Profile

I need to know the accounting treatment of amount paid to consulting company on account of Restructuring of HR policies. Any information?


Henry H Zhu, CMA, CFM
Title: Head of Planning and Analysis
Company: Refinery 29, Inc.
(Head of Planning and Analysis, Refinery 29, Inc.) |

I'd say expense it as incurred hitting consulting fee account.

Topic Expert
Malak Kazan
Title: VP, Special Projects
Company: ERI Economic Research Institute
(VP, Special Projects, ERI Economic Research Institute) |

I would add if restructuring "benefit" will last a few years and on-going revisions/changes to HR policies will be annually you may want to differentiate the two.

Mateen Khan
Title: Finance Manager
Company: Auditing
(Finance Manager, Auditing) |

Thanks Henry & Malak,

I discussed it with one of my friend (CPA) and CFO is one of the MNC they are currently having the same activity going on in their organization. Their policy is to record total amount paid to consulting company as expense and record as period cost.

Topic Expert
Patrick Dunne
Title: Chief Financial Officer
Company: Milk Source
(Chief Financial Officer, Milk Source) |

This amount would not be classified as restructuring. This would be a period operating cost.

Mateen Khan
Title: Finance Manager
Company: Auditing
(Finance Manager, Auditing) |

Thanks Patrcik, really appreciate.


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