Standard CAS-1

Area Covered Classification of Cost

CAS-2

Capacity Determination

CAS-3

Overheads

CAS-4

Cost of Production for Captive Consumption

CAS-5

Detemination of Average Cost of Transportation.

CAS-6

Material Cost

CAS-7

Employee Cost

CAS-8

Cost of Utilities

CAS-9

Packing Material Cost

CAS-10

Direct Expenses

CAS-11

Administrative Overheads

CAS-12

Repair & Maintenance Cost

CAS-13

Cost of Service Cost Centre

CAS-14

Pollution Control Cost

CAS-15

Selling & Distribution Overheads

CAS-16

Depreciation & Amortisation

CAS-17

Interest & Financing Charges

CAS-18

Research & Development Cost

Disclosure Requirements Classification of Cost should be done on "Basis of Classification" chossen with predetermined objectives. Classification of Cost Items should be followed consistenetly. Any changes in classification should be made only if law is required to do so and/or for better presentation. Materials effects for any change in classification of cost should be disclosed in cost statement. If the effect of changes is not acertainable, fact should be disclosed in cost statements. Details of basis for arriving capacity determination, variables used and assumption made. Any Change in installed capacity due to modification of Machine. Licenced & Installed capacity should be disclosed in absolute term of production whereas practical capacity, normal capacity and actual capacity utilization should be disclosed in absolute terms as well as percentage of installed capacity. Impact in capacity due to lease of machine should be disclosed separately. In case of low capacity utilization, reasons for same should be disclosed with classification of reasons like controllable and uncontrollable. In case of excess capacity utilization, the same shoule be disclosed in absolute term and in term of percentage with reason. Change in basis for Apportionment of Overhaed can be considered necessary due to change in circumstances like change in technology, degree of mechanization etc. and proper disclouser should be made in Cost Records. Assessable value of goods used for captive consumption is 115% of cost of production of such goods as per Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000. Any changes in cost accounting principles and practices to determine cost of production in terms of comparability with previous period should be disclosed. Cost of Production for captive consumption and records thereoff shall be certified by Cost Accountants for the companies covered under section 209 (1) (d). If opening & closing stock of work-in-progress and finished goods used for captive consumption are not readily available for certification, the same should be disclosed. Finance Act 2003 specifies certification requirements of transportation cost for claiming deduction while arriving assessable value of excisable goods for home consumption/export. Besides the above, standardised transportation cost can be used for the followingsa) Insurance Claim Valuation. b) Freight subsidy for Fertilizer Industry c) Freight included in Inventory hypotected or going to be hypotected to Bank/other Financial Institution. Following Records and/or procedures to be followed for determining equalized transportation cost. Abnormal cost relating to transportation should be excluded from computation of average cost. Records shall be maintained separately for inward and outward materials with every details. Separate records for transportation incurred for home consumed and export goods. Records of transportation cost from factory to depot shall be maintained separately. Records of transportation cost incurred for Job work materials should be maintained separately. Records for transportation cost incurred for any trading activity should be maintained separately. Records for transportation cost for exempted goods, excisable goods cleared for export shall be maintained separately. Quantity and rate of major items of materials should be disclosed. Major items are defined as those who form 5 % of Cost of Materials.

Where standard cost applied for valuation, Price Variance should be included in Material Cost. Basis of valuation of materials shall be disclosed. Any change in Cost Accounting Principles and methods applied for determination of material cost during the period covered by cost statement which has material effect on the cost of material should be disclosed. Where the effect of such change is not ascertainable, facts shall be disclosed. Any Abnormal cost excluded from Material Cost shall be disclosed. Any demurrage or detention charges, penalty levied by transport or other authorities excluded from Material Cost shall be disclosed. Cost of Materials procurred from related parties shall be disclosed. Any cost imputed in arriving at material cost shall be disclosed. Disclosure shall be made only where significant, material and quantifiable. Disclosure may be made in the body of cost statement or as a footnote or as a separate scehdule. Employee Cost attributable to Capital works of jobs in the nature of deferred revenue expenditure indicating the method followed in detrmining the cost of such capital work shall be disclosed. Separation Cost payable to employees shall be disclosed. Any abnoral cost excluded from Employee Cost shall be disclosed. Penalties and Damages paid etc. excluded from Employee Cost shall be disclosed. Any subsidy, grant, incentive and any such payment reduced from Employee Cost shall be disclosed. Employee Cost paid to related parties shall be disclosed. Employee Cost incurred in Foreign exchange shall be disclosed. Any change in Cost Accounting Principles and methods applied for measurement and assignment of employee cost during the period covered by cost statement which has material effect on employee cost should be disclosed. Where the effect of such change is not ascertainable, facts shall be disclosed. Disclosure shall be made only where significant, material and quantifiable. Disclosure may be made in the body of cost statement or as a footnote or as a separate scehdule. Not applicable to the organization primarily engaged in generation and sale of utilities. It is not applicable for any issues related to ascertainment and treatment of Carbon Credit. The basis of distribution of Cost of Utilities to the consuming centres shall be disclosed. Where cost of utilities is ascertained at standard cost, Price Variance and Usage Variance shall be disclosed. Cost and Price of Utilities received from / supplied to related parties shall be disclosed. Cost and Price of Utilities received from / supplied as inter department/company transfer shall be disclosed. Cost of Utilities incurred in foreign exchange shall be disclosed. Any subsidy, grant, incentive and any such payments reduced from Cost of Utilities shall be disclosed. Credits/Recoveries relating to Cost of Utilities shall be disclosed. Any abonrmal cost and Penalties & damages paid excluded from Cost of Utilities shall be disclosed. The basis of valuation of Packing Material Cost shall be disclosed. Where Packing Material Cost is ascertained at standard cost, Price Variance and Usage Variance shall be disclosed. Cost and Price of Packing Materials received from / supplied to related parties shall be disclosed. Cost of Packing Material incurred in foreign exchange shall be disclosed. Any subsidy, grant, incentive & any such payment reduced from Packing Material Cost shall be disclosed. Credits/Recoveries relating to Packing Material Cost shall be disclosed. Any abonrmal cost and Penalties & damages paid excluded from Packing Material Cost shall be disclosed. The basis of distribution of Direct Expenses shall be disclosed. Quantity and Rate of items of Direct Expenses shall be disclosed. Where Direct Expenses is accounted at standard cost, Price Variance and Usage Variance shall be disclosed.

Direct Expenses representing procurement of resources and expenses incurred in connection with resource generated shall be disclosed. Direct Expenses paid/payable to related parties shall be disclosed. Direct Expenses incurred in foreign exchange shall be disclosed. Any subsidy, grant, incentive & any such payment reduced from Direct Expenses shall be disclosed. Credits/Recoveries relating to Direct Expenses shall be disclosed. Any abonrmal cost and Penalties & damages paid excluded from Direct Cost shall be disclosed. The basis of assignment of Administrative Overhead to the cost object shall be disclosed. Any imputed cost included as part of Administrative Overheads shall be disclosed. Administrative Overheads incurred in foreign exchange shall be disclosed. Cost of Administrative Overhead received from / supplied to related parties shall be disclosed. Any subsidy, grant, incentive & any such payment reduced from Admn. Overheads shall be disclosed. Credits/Recoveries relating to Administrative Overhaed shall be disclosed. Any abnormal portion of Administrative Overhead shall be disclosed. Penalties & damages paid excluded from Administrative Overhead shall be disclosed. The basis of distribution of Repair & Maintenance Cost to Cost object or unit shall be disclosed. Where standard cost is applied in repair and maintenance cost, price variance and usage variance shall be disclosed Repairs & Maintenance Cost of job done in-house and outsourced shall be disclosed separately. Cost of major overhauls, asset category wise and basis of amortization shall be disclosed. Repairs & Maintenance Cost paid / payable to related parties shall be disclosed. Repairs & Maintenance Cost incurred in foreign exchange shall be disclosed. Any subsidy, grant, incentive & any such payment reduced from Repairs & Maintenance shall be disclosed. Any Credit/Recoveries relating to Repairs & Maintenance shall be disclosed. Any abnormal portion of Repairs & Maintenance shall be disclosed. Penalties & damages paid excluded from Repairs & Maintenance shall be disclosed.

ce Cost Centre

ribution Overheads

& Amortisation

ancing Charges

Development Cost

Proper Records on following aspects have to be maintained for Cost Audit in Steel Manufacturing Company: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Materials Salaries & Wages Service Department Expenses Utilities Workshop / Repairs & Maintenance / Tool Room Depreciation Royalty & Thechnical Knowhow Fees Other Overhead Conversion Cost Research & Development Expenses Interest Expenses / Incentive on Exports By Product Joint Product Captive Consumption Expenses on Capital Natures Semi Finished Goods & Finished Goods, Stock Cost Statement Production Records Reconciliation of Cost & Financial Accounts. Adjustment of Cost Variances Records of Physical Verifications Inetr company transfer. Statistical Records

Cost Audit Data: Two schedules have to be prepared for cost audit Schedule I Annexure - I :- Statement showing the cost of Nitrogen/Oxygen/Effluent Treatment during the Period Annexure - II :- Statement showing Cost of major materials purchased and consumed during the Period. Annexure - III :- Statement showing Cost of Power Generated, Purchased and Consumption during the Period. Schedule II Proforma A Proforma B Proforma C Proforma D Proforma E Proforma F Proforma G Proforma H Proforma I

a)

Statement showing Cost of Production of internally manufactured materials e.g Spong Iron, Ferro Alloys e Statement showing Cost of Production of (Specify of Steel Product) Sales details including Sales & Distribution Expenses Statement showing value of Semi finished Goods Statement showing Cost of Sales Realization and Margin Statement showing the allocation of Expenses incurred and income received for product covered under C Statement showing the allocation / apportionment of Total Expenses income of the company between Pro Statement Reason for Loss of Production Statement showing summery of Cost of Production, Cost of Sales, Sales Realization and Margin per unit.

g the Period. during the Period.

Spong Iron, Ferro Alloys etc.

or product covered under Cost Audit and other activities. the company between Production covered under Rule 2 and other activities.

zation and Margin per unit.