Session 3: conversion table example Back

Conversion table example

Example one

You will correspond a bag of ready-to-prepare rice bought in a supermarket with the ABS product group ‘cereal foods’, and not with ‘rice in the husk’, because ‘rice in the husk’ comes at the beginning of the list and is a raw agricultural product straight off the farm, while the rice you bought in the supermarket is a processed cereal food (that is, the husk removed).

Example two

Your organisation might have an account item labelled ‘paper’. The ABS product groups are

Product Groups	Descriptions
Pulp, paper and paperboard	Pulp, paper and paperboard, newsprint, paper stock, copying paper
Paper containers	Paper and paperboard containers, solid or corrugated, paper bags, packets, sacks, cardboard sheeting
Paper products	Paper trays, dishes, plates, cups, toilet paper, facial tissue, sanitary paper, serviettes, towels, box files, decorations, wallpaper and other paper products
Printing and services to printing	Printing and services to printing, envelopes, labels, cards, postcards, pads, diaries, stationery, stamps, banknotes, cheque books, tickets

Ask your accountant about whether ‘paper’ in your accounts means raw manufactured paper or paper bags or writing pads and envelopes. Once you’re clear about the nature of your purchase you will be in a position to correctly allocate it.

Example three

Assume you find ‘Consultants’ in your accounts. ISA offers the ABS product groups

• Scientific research, technical and computer services
• Research and meteorology services
• Architectural services
• Surveying services
• Technical services
• Data processing services
• Legal services
• Accounting services
• Advertising services

It may be that the item in your account is an aggregate over many invoices paid to various consultancy firms. Your accountant will be able to tell you that for example 80% of your expenses were for accountants, 15% for software and IT firms, and 5% for lawyers. Based on this split, you can allocate certain amounts to the right ABS product group (accounting, computer and legal services). This example is typical for many company accounts.