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Exposure Draft for Cost Accounting Standard on Treatment of Revenue for Cost Statement

News and Press Release - Dated:- 30-12-2015 - The following is the COST ACCOUNTING STANDARD on TREATMENT OF REVENUE FOR COST STATEMENT (CAS__) issued by the Council of the Institute of Cost Accountants of India. In this Standard, the standard portions have been set in bold italic type. These are to be read in the context of the background material which has been set in normal type. 1. Introduction This standard deals with the principles and methods of measurement, treatment and assignment of rev .....

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th the meaning specified. Any term not defined in this Standard shall have the same meaning and expression as set out in the Glossary of Terms issued by the Council. 4.1 By-product: Product with relatively low value produced incidentally in the manufacturing of the product. 4.2 Defectives: Materials, products or intermediate products that do not meet quality standards. This may include reworks or rejects. 4.3 Equity: a residual interest in the assets of an entity after deducting all of its liabi .....

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et sales realisation is a component of revenue from operations. 4.6 Other Income: is income that cannot be classified as revenue from operations. Examples: Profit on sale of fixed assets and investments; Interest from investments or deposits outside the business; Insurance claims received, not adjusted against an item of cost; Rent from properties leased (unless the primary activity itself is leasing); Credits for previous years adjustments; Dividend income on investments; Gain on foreign curren .....

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ncome from sale of goods or services provided and other operating revenue, such as government subsidy and incentives on export of goods. Revenue from operations is recognised at gross amount excluding indirect taxes, such as excise duty levied on manufactured goods and service tax levied on service provided. Sometime, revenue is presented at the amount including excise duty paid and excise duty paid is presented as deduction from the revenue (including excise duty). 4.9 Scrap: Discarded material .....

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tely for each unit or location of an entity for each type of goods sold or service provided. It shall also be measured separately for sale of each type of by-products, defectives, second grade products, scrap or wastes. Example of waste is hard waste and soft waste in textile industry. 5.2 If a by-product is further processed before sale, sales realisation of such by-product shall be net of further processing cost. Its net sales realisation shall be adjusted against the joint cost of production .....

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the fair value. The discount rate used should be whichever of the following is more clearly determinable: (a) The prevailing rate of similar instrument of an issuer with a similar credit rating; or (b) The rate of interest that discounts the nominal amount of the instrument to the current cash sales price of the goods or services. Time value of money shall be considered only if it is considered in recognizing revenue in financial statements. Net Sale realization of defective, second-grade produ .....

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the above criterion is not met, revenue from the services provided shall be recognized only to the extent of the expenses recognized that are recoverable. 5.5 Other income shall not be considered in determining profit or loss as per cost accounts. 5.6 Export incentives, subsidies received or receivable on sales shall be part of revenue from operations and shall be identified with each product sold or service provided. 5.7 Any Subsidy, Grant, Incentive or any such payment received or receivable .....

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nge in the cost accounting principles applied for the determination of the revenue 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 of an entity. 6. Assignment of Revenue: Revenue for each type of product or service shall be assigned directly to that product or service to the extent it is economically feasible. Economic feasibility implie .....

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