TMI BlogCost of UtilitiesX X X X Extracts X X X X X X X X Extracts X X X X ..... nation of the cost of product or service, and the presentation and disclosure in cost statements. Objective 2. The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the cost of utilities with reasonable accuracy. 3. Scope 3.1 This standard shall be applied to cost statements which require classification, measurement, assignment, presentation and disclosure of cost of utilities including those requiring attestation. 3.2 For determining the cost of production to arrive at an assessable value of excisable utilities used for captive consumption, Cost Accounting Standard 4 on Cost of Production for Captive Consumption (CAS 4) shall apply. 3.3 This standard shall n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [ 4.5 Imputed Costs: Hypothetical or notional costs, not involving cash outlay, computed for any purpose .] 5 [ 4.6 Normal capacity: Normal Capacity is the production achieved or achievable on an average over a number of periods or seasons under normal circumstances taking into account the loss of capacity resulting from planned maintenance .] In case of any standby utility the normal capacity will be the same as actual production of the utility. The normal capacity of a utility meant for captive consumption would be based on the normal capacity for the production facility of the end product of the consuming unit. 4.7 Standard Cost: A predetermined cost of resource inputs for the cost object computed with reference to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any transfers shall comprise direct material cost, direct employee cost, direct expenses, factory overheads, distribution cost and share of administrative overheads. 5.3.4 Cost of Utilities generated for the sale to outside parties shall comprise direct material cost, direct employee cost, direct expenses, factory overheads, distribution cost, share of administrative overheads and marketing overheads. The sale value of such utilities will also include the margin. 5.4 Finance costs incurred in connection with the utilities shall not form part of cost of utilities. 5.5 The cost of utilities shall include the cost of distribution of such utilities. The cost of distribution will consist of the cost of delivery of utilities up to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be made only if, it is required by law or for compliance with the requirements of a cost accounting standard, or a change would result in a more appropriate preparation or presentation of cost statements of an organisation. 6. Assignment of costs 6.1 While assigning cost of utilities, traceability to a cost object in an economically feasible manner shall be the guiding principle. 6.2 Where the cost of utilities is not directly traceable to cost object, it shall be assigned on the most appropriate basis. 6.3 The most appropriate basis of distribution of cost of a utility to the departments consuming services is to be derived from usage parameters. 7. Presentation 7.1 Utilities costs shall be presented as a separate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement which has a material effect on the Cost of utilities. Where the effect of such change is not ascertainable wholly or partly the fact shall be indicated. 8.3 Disclosures shall be made only where material, significant and quantifiable. 8.4 Disclosures shall be made in the body of the Cost Statement or as a foot note or as a separate schedule. ----------------------- Notes:- 1. Adapted from CAS 1 paragraph 6.5.19 2. Adapted from CIMA Terminology 3. Adapted from CIMA Terminology. 4. Adapted from CAS 1 paragraph 6.5.13 5. Adapted from CAS 2 paragraph 4.4 6. Adapted from paragraph 5.7 of CAS 3 7. Related party as per the applicable legal requirements relating to the cost statement a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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