Current Cost of Sales Adjustment (COSA)

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on March 21, 2023


In current cost accounting (CCA), the cost of sales is calculated based on the cost of replacing the goods at the time they are sold.

The important principle is that current costs must be matched with current revenues.

Sales are current revenues and, out of the costs, all operating expenses are current costs. In the case of inventories, certain adjustments must be made, which is referred to as the Cost of Sales Adjustment (COSA).

Cost of Sales Adjustment Formula

COSA can be calculated using the following formula:

Cost of Sales Adjustment (COSA) Formula


  • C = Historical cost of closing stock
  • O = Historical cost of opening stock
  • Ic = Index number appropriate to closing stock
  • Io = Index number appropriate to opening stock


Calculate the cost of sales adjustment (COSA) using the following information:

Historical Cost Index Number
$ $
Opening Stock 52,000 100
Purchases 220,000 110
Total Goods 272,000
Less: Closing Stock 72,000 120
Cost of Sales 200,000


To solve this, start with the COSA formula mentioned above and substitute in the correct values from the table above. In particular:

COSA = (72,000 - 52,000) - 110 (72,000 / 120 - 52,000 / 120)

= 20,000 - 110 (600 - 520)

= 20,000 - 8,800


Another approach is to calculate COSA as follows:

Current Cost of Sales (COSA) Example

COSA = Current cost of sales - Historical cost of sales

= 2,11,200 - 2,00,000

= $11,200

Current Cost of Sales Adjustment (COSA) FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.