Central Council of the ICWAI has approved on 12th September 2009 the Cost Accounting Standards on Employee Cost (CAS-7) and Cost of Utilities (CAS-8).
The same have been hosted on the website of the ICWAI.
Final Cost Accounting Standard on Employee Cost (CAS-7).
http://www.icwai.org/icwai/docs/CASB/CAS7.pdf
Final Cost Accounting Standard on Cost of Utilities (CAS-8).
http://www.icwai.org/icwai/docs/CASB/CAS8.pdf
posted at www.taxmannindia.blogspot.com
Showing posts with label Cost Accounting standards. Show all posts
Showing posts with label Cost Accounting standards. Show all posts
Thursday, September 17, 2009
Monday, August 3, 2009
Cost accounting norms to be in tune with IFRS
It is not just Indian accounting standards, which would converge fully with the International Financial Reporting Standards (IFRS) by 2011, but cost accounting standards (CAS) would also need to be in tune with the global model.
The Institute of Cost and Works Accountants of India (ICWAI), the apex body to regulate the profession of cost accountants, is working out the impact of IFRS on costing principles.
“IFRS would affect the structure of cost of product and hence the Institute bringing in necessary changes and preparing its members,” said ICWAI President GN Venkataraman. IFRS are interpretations and the framework for the preparation and presentation of financial statements adopted by the International Accounting Standards Board (IASB).
The ICWAI has taken this initiative at the behest of the International Federation of Accountants (IFAC), the global organisation for the accountancy profession, which is for the first time addressing costing and has come out with guidelines on the impact of IFRS on costing principles.
Post-IFRS, moving away from historical cost, value of asset would be based on current cost, which would impact not only the raw material cost but also finished goods and overheads, said Chandra Wadhwa, past president of ICWAI and added that this would ultimately affect the cost of production and would directly impact the industry.
Under historical basis approach, assets are presented on the balance sheet at their value at the time of acquisition (generally represented by the purchase cost). However, experts believe that in today’s time with widespread use of complex and complicated financial instruments and risk management strategies have rendered yesterday’s prices obsolete. Under the IFRS, historical cost has been abandoned and replaced by a current cost system for a more accurate financial reporting.
At present, there are over 100 countries where the IFRS is followed. Once the Indian accounting standards converge with the standard, it would be first applicable for the listed companies, followed by other entities. By 2011, about 150 countries would have adopted the IFRS. However, the US plans to move to the pattern by 2014.
According to Wadhwa, ICWAI would bring out cost accounting standards in line with the IFRS and would make changes in those, which are already out. The institute has issued six CAS and would come out with the rest 33 in two years.
The Institute of Cost and Works Accountants of India (ICWAI), the apex body to regulate the profession of cost accountants, is working out the impact of IFRS on costing principles.
“IFRS would affect the structure of cost of product and hence the Institute bringing in necessary changes and preparing its members,” said ICWAI President GN Venkataraman. IFRS are interpretations and the framework for the preparation and presentation of financial statements adopted by the International Accounting Standards Board (IASB).
The ICWAI has taken this initiative at the behest of the International Federation of Accountants (IFAC), the global organisation for the accountancy profession, which is for the first time addressing costing and has come out with guidelines on the impact of IFRS on costing principles.
Post-IFRS, moving away from historical cost, value of asset would be based on current cost, which would impact not only the raw material cost but also finished goods and overheads, said Chandra Wadhwa, past president of ICWAI and added that this would ultimately affect the cost of production and would directly impact the industry.
Under historical basis approach, assets are presented on the balance sheet at their value at the time of acquisition (generally represented by the purchase cost). However, experts believe that in today’s time with widespread use of complex and complicated financial instruments and risk management strategies have rendered yesterday’s prices obsolete. Under the IFRS, historical cost has been abandoned and replaced by a current cost system for a more accurate financial reporting.
At present, there are over 100 countries where the IFRS is followed. Once the Indian accounting standards converge with the standard, it would be first applicable for the listed companies, followed by other entities. By 2011, about 150 countries would have adopted the IFRS. However, the US plans to move to the pattern by 2014.
According to Wadhwa, ICWAI would bring out cost accounting standards in line with the IFRS and would make changes in those, which are already out. The institute has issued six CAS and would come out with the rest 33 in two years.
Sources:Business Standard
Sunday, April 26, 2009
Mandatory application of Cost Accounting Standards
The Council of the ICWAI at its 251st Meeting held on 12-13 February 2009 decided as below:
Mandatory application of Cost Accounting Standards
“RESOLVED THAT the following Cost Accounting Standards
CAS 1: Classifications of Costs
CAS 2: Capacity Determination
CAS 3: Overheads
CAS 4: Cost of Production for Captive Consumption
CAS 5: Determination of Average (Equalized) Cost of Transportation
CAS 6: Material Cost
shall be mandatory with effect from period commencing on or after 1st April 2010 for being applied for the preparation and certification of General Purpose Cost Accounting Statements. Since there is no statutory requirement for the application of such Cost Accounting Standards for the preparation and certification of Cost Accounting Statements, in case the cost accountant is of the opinion that the aforesaid standards have not been complied with for the preparation of the Cost Statements, it shall be his duty to make a suitable disclosure/qualification in his audit report/certificate”
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