Having a look at the GAP annual reports and noticed something...

Having a look at the GAP annual reports and noticed something quite strange in its past revenue/cost practices. This came to light as the 2018 figures were restated for comparison in the 2019 annual report. This restatement was said by GAP as due to compliance with the updated accounting standard AASB 15.

The only change identified in the notes as arising from AASB 15 was:

"Rebates and discounts payable to customers: The Group provides both fixed and variable rebates and discounts to its customers. As the consideration payable to these customers does not relate to distinct goods or services provided to the customer, it is required to be recorded as a reduction of revenue. This resulted in some rebates requiring reclassification from cost of goods sold to revenue. AASB 15 did impact the measurement of the Group’s rebates and discounts. The comparative year was restated consistent with current period disclosure."

Comparing the changed lines in the Operating Statement:

On the face of it, in prior years GAP appears to have reported on sales grossed up by discounts and rebates, a practice that would expand the accounting revenues. It seems that the cost of raw materials were then increased by the amount of discount and rebates. And further, it also appears that labour costs were partly accounted for in the cost of raw materials.

If true, the net effect would be to increase the perceived size of operations and overstate labour efficiency.

Has anyone come across these points

before? Have I read this wrong? Is there a sensible explanation?

Appreciate any help.