In an ordinary production-and-trading model, gross profit is revenue less cost of sales. It shows the result before other expenses and is not the same as net profit or cash flow. IAS 2 describes recognizing the cost of inventories sold as an expense in the period in which the related revenue is recognized. Source: **curr-stat-ias2**, About.
What the figure includes
For comparison, establish which expenses are included in cost of sales. Moving logistics or other costs between functions can change gross margin without changing the final result. A familiar heading therefore does not replace reading the accounting policy and breakdowns.
Do not compare gross profit with the full cost of purchases made during the period: some purchases may remain in inventory. Nor is higher revenue sufficient evidence that gross profit has increased. Price, mix, volume, cost of sales and markdowns can act in different directions.
General educational concepts under IFRS; not an individual recommendation or a statement of current Russian rules.
Source references retained: **curr-stat-ias2**, About; revenue less cost of sales, IAS 2 inventory-expense timing, gross-margin classification, logistics, accounting-policy, inventory, price, mix, volume, cost and markdown caveats preserved.
Educational material is not individual investment, legal or tax advice.
