Aid to auditors tracking costs

Chennai: 13/07/2011: The Hindu: Business Line: Book Value Column: Title: Guide to Cost Accounting Records & Cost Audit, under cost Accounting Records Rules 2011 & Cost Audit Rules 2011.

If it has been long since you studied costing, a quick refresher can be chapter 3 in ‘Guide to Cost Accounting Records & Cost Audit’ by G. Srinivasan Anand (www.taxmann.com). The chapter discusses the Cost Accounting Standards (CAS) issued by the Institute of Cost and Works Accountants of India.

For instance, CAS 1 deals with classification of costs, based on nature of expense, traceability, fixed/variable behaviour, time period, and so on. In the case of joint products, joint costs are to be allocated among the products on a rational and consistent basis, the author notes. As for by-products, the net realisable value of the same should be credited to the cost of production of the main product, he adds.

A chapter on ‘compliance report’ cites the definition of ‘product’ as any tangible or intangible goods, material, substance, article, idea, know-how, method, information, object, service, etc., that is the result of human, mechanical, industrial, chemical, or natural act, process, procedure, function, operation, technique, or treatment and is intended for use, consumption, sale, transport, store, delivery or disposal.

Of instructional value to practising professionals.

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