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Repairs & Maintenance Cost

CAS - 12 - Companies Law - CAS - 12 - CAS - 12 Repairs & Maintenance Cost The following is the COST ACCOUNTING STANDARD - 12 (CAS - 12) issued by the Council of The Institute of Cost and Works Accountants of India on "REPAIRS AND MAINTENANCE COST". In this Standard, the standard portions have been set in bold italic type. This standard should be read in the context of the background material which has been set in normal type. 1. Introduction 1.1 This standard deals with the princip .....

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e 3. This standard should be applied to cost statements which require classification, measurement, assignment, presentation and disclosure of repairs and maintenance cost including those requiring attestation. Definitions 4. The following terms are being used in this standard with the meaning specified. 1[4.1 Cost Object: This includes a product, service, cost centre, activity, sub-activity, project, contract, customer or distribution channel or any other unit in relation to which costs are asce .....

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ance Costs: Costs incurred by an enterprise in connection with the borrowing of funds - This will include interest and commitment charges on bank borrowings, other short term and long term borrowings, amortisation of discounts or premium related to borrowings, amortisation of ancillary cost incurred in connection with the arrangements of borrowings, finance charges in respect of finance leases, other similar arrangements and exchange differences arising from foreign currency borrowings to the ex .....

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ds: Indirect costs involved in the production process or in rendering service.] The terms Production Overheads, Factory Overheads, Works Overheads and Manufacturing Overheads denote the same meaning and are used interchangeably. Production overheads shall include administration cost relating to production, factory, works or manufacturing. 4.7 Repairs and maintenance cost: Cost of all activities which have the objective of maintaining or restoring an asset in or to a state in which it can perform .....

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ly restore the asset to intended working condition. 4.8 Standard Cost: A predetermined cost of resource inputs for the cost object computed with reference to set of technical specifications and efficient operating conditions. Standard costs are used as scale of reference to compare the actual costs with the standard cost with a view to determine the variances, if any, and analyse the causes of variances and take proper measure to control them. Standard costs are also used for estimation. 5. Prin .....

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.2 Cost of in-house repairs and maintenance activity shall include cost of materials, consumable stores, spares, manpower, equipment usage, utilities, and other resources used in such activity. 5.3 Cost of repairs and maintenance activity carried out by outside contractors inside the entity shall include charges payable to the contractor and cost of materials, consumable stores, spares, manpower, equipment usage, utilities, and other costs incurred by the entity for such jobs. 5.4 Cost of repair .....

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of own materials, consumable stores, spares, manpower, equipment usage, utilities and other costs used in such jobs. 5.6.1 Each type of repairs and maintenance shall be treated as a distinct activity, if material and identifiable. For example, routine or preventive maintenance, planned (predictive or corrective) maintenance and breakdown maintenance should be identified separately. 5.6.2 Cost of repairs and maintenance activity shall be measured for each major asset category separately. 5.7 Cost .....

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eed the cost of reconditioning the spare. The difference between the total of the cost of the new spare and the reconditioning cost and the value of the reconditioned spare should be treated as repairs and maintenance cost. Example: The cost of new spare is ₹ 1 crore and the value of the existing spare after reconditioning is estimated at ₹ 20 lakhs, the difference of ₹ 80 lakhs should be treated as repairs and maintenance cost. 5.9 The cost of major overhaul shall be amortized .....

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age variances attributable to abnormal reasons shall be excluded from repairs and maintenance cost. 5.13 Subsidy / Grant / Incentive or amount of similar nature received/receivable with respect to repairs and maintenance activity, if any, shall be reduced for ascertainment of the cost object to which such amounts are related. 5.14 Any repairs and maintenance cost resulting from some abnormal circumstances, if material and quantifiable, shall not form part of the repairs and maintenance cost. Exa .....

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st. 5.16 Credits/ recoveries relating to the repairs and maintenance activity, material and quantifiable, shall be deducted to arrive at the net repairs and maintenance cost. 5.17 Any change in the cost accounting principles applied for the measurement of the repairs and maintenance cost should 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 .....

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portion to the benefits received by them. 6.3 If the repairs and maintenance cost (including the share of the cost of reciprocal exchange of services) is shared by several cost objects, the related cost shall be measured as an aggregate and distributed among the cost objects as per principles laid down in Cost Accounting Standard - 3. 7. Presentation 7.1 Repairs and maintenance cost, if material, shall be presented in the cost statement as a separate item of cost. 7.2 Asset category wise details .....

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