CAS 8 - Cost of utilities Flashcards
1
Q
Definition
A
- Significant inputs such as power, water , compressed air and like which are used for manufacturing but do not form part of final product.
- Stand by utilities- Created for safeguard against failure. eg: generator , invertor
2
Q
Principles of measurement
A
- Purchase of utilities - purchase price inclusive of all taxes and duties net of refunds - no cash disc
- Self manf - DM,DL,DE,POH,AOH(prod)
- Self manf - inter unit transfer - valued- total of DM, DL , DE, POH, Dist OH
- Self gen- inter company- valued- total of DM, DL, DE , POH, Dist OH and AOH
- Self gen- sale to outsiders- total of DM, DL, DE, POH, Dist OH, AOH and selling OH , including profit
- COP and dist of utilities- based- normal capacity or actual capacity utilization whichever is higher
- Unabsorbed cost if any - abnormal cost
- Cost of stand by- includes commited cost- retaining such utilities
3
Q
General principles
A
Principles
- 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
4
Q
Assignment of cost
A
- If direct- economically feasible manner
- If indirect- based on most appropriate basis
- Usage parameter
5
Q
Presentation
A
- If material, utilities cost shall be presented as a seperate cost head in a cost statement.
6
Q
Disclosure
A
- Basis of dist
- utilities cost relating to - outsiders, inter unit, inter -
company - Abnormal cost is includable
- Penalties, damages or fines paid to stat authorities
- Subsidy, grant, incentives recvd is reduced
- Related party transactions
- Forex Transactions