CAS 12- Repairs and Maintenance Cost Flashcards
1
Q
Definition
A
Cost of all activities relating in maintaining or restoring an asst to a state in which it can perform required function at intended capacity and efficiency
2
Q
Principles of measurement
A
- Valued at total of direct and indirect cost
- Inhouse repairs- valued- cost of a resources including cost of materials,consumables,spares,stores,manpower,
equipment, usage and utilities - Outside contractors- Total cost of all resources and payment made
- outside contractors- their premises- invoice including all taxes and duties net of all credits. no cash discount
3
Q
Treatment
A
- smaller spares- written off in the year of purchase according to financial policy of entity
- high value spares- Diff between the value of new spare in market and value of existing reconditioned spare shall be treated as repair and maintainence cost
4
Q
General Principles
A
- Finance cost is not included
- Abnormal cost is not included
- Imputed cost is included ( only materials)
- Depreciation- based on benefit received
- Credit or recoveries shall be reduced
- Subsidy, grant or incentives shall be reduced
- Penalties ,damages, fines paid to stat auth not cost
- Cost-standard rates- variance is part of cost
5
Q
Assignment of cost
A
- Direct
Traceable to cost object- economically feasible manner - Indirect
a) Cause and effect- Cause- Process op activity
Effect- Incurence of cost
b) Benefits received
6
Q
Presentation
A
- If material shall be disclosed as a seperate cost item
2. Asset wise or activity wise details if material shall be disclosed
7
Q
Disclosure
A
- basis of distribution
- details of in house, outsourced repairs, maintenance cost
- Cost of major overhaul and amortization assetwise shall be disclosed seperately
- Abnormal cost is includable
- Penalties, damages or fines paid to stat authorities
- Subsidy, grant, incentives recvd is reduced
- Related party transactions
- Forex Transactions
