CAS 8 - Cost of utilities Flashcards

1
Q

Definition

A
  1. Significant inputs such as power, water , compressed air and like which are used for manufacturing but do not form part of final product.
  2. Stand by utilities- Created for safeguard against failure. eg: generator , invertor
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2
Q

Principles of measurement

A
  1. Purchase of utilities - purchase price inclusive of all taxes and duties net of refunds - no cash disc
  2. Self manf - DM,DL,DE,POH,AOH(prod)
  3. Self manf - inter unit transfer - valued- total of DM, DL , DE, POH, Dist OH
  4. Self gen- inter company- valued- total of DM, DL, DE , POH, Dist OH and AOH
  5. Self gen- sale to outsiders- total of DM, DL, DE, POH, Dist OH, AOH and selling OH , including profit
  6. COP and dist of utilities- based- normal capacity or actual capacity utilization whichever is higher
  7. Unabsorbed cost if any - abnormal cost
  8. Cost of stand by- includes commited cost- retaining such utilities
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3
Q

General principles

A

Principles

  1. Finance cost is not included
  2. Abnormal cost is not included
  3. Imputed cost is included ( only materials)
  4. Depreciation- based on benefit received
  5. Credit or recoveries shall be reduced
  6. Subsidy, grant or incentives shall be reduced
  7. Penalties ,damages, fines paid to stat auth not cost
  8. Cost-standard rates- variance is part of cost
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4
Q

Assignment of cost

A
  1. If direct- economically feasible manner
  2. If indirect- based on most appropriate basis
  3. Usage parameter
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5
Q

Presentation

A
  1. If material, utilities cost shall be presented as a seperate cost head in a cost statement.
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6
Q

Disclosure

A
  1. Basis of dist
  2. utilities cost relating to - outsiders, inter unit, inter -
    company
  3. Abnormal cost is includable
  4. Penalties, damages or fines paid to stat authorities
  5. Subsidy, grant, incentives recvd is reduced
  6. Related party transactions
  7. Forex Transactions
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