Cost Accounting Standards (CAS) – CAS-1 to CAS-24

Cost Accounting Standards (CAS) are a set of standardised principles and guidelines issued by the Institute of Cost Accountants of India (ICMAI) to ensure uniformity, consistency, and accuracy in the measurement, classification, assignment, and presentation of cost-related information in cost statements. Each standard (CAS-1 to CAS-24) addresses a specific component of cost, such as material cost, employee cost, depreciation, overheads, and others, defining the methodology for determining and reporting these costs in a reliable and consistent manner.

Table of Contents

1. CAS-1 – Cost Accounting Standard on Classification of Cost
2. CAS-2 – Cost Accounting Standard on Capacity Determination
3. CAS-3 – Cost Accounting Standard on Production and Operation Overheads
4. CAS-4 – Cost Accounting Standard on Cost of Production for Captive Consumption
5. CAS-5 – Cost Accounting Standard on Determination of Average (Equalised) Cost of Transportation
6. CAS-6 – Cost Accounting Standard on Material Cost
7. CAS-7 – Cost Accounting Standard on Employee Cost
8. CAS-8 – Cost Accounting Standard on Cost of Utilities
9. CAS-9 – Cost Accounting Standard on Packing Material Cost
10. CAS-10 – Cost Accounting Standard on Direct Expenses
11. CAS-11 – Cost Accounting Standard on Administrative Overheads
12. CAS-12 – Cost Accounting Standard on Repairs and Maintenance
13. CAS-13 – Cost Accounting Standard on Cost of Service Cost Centre
14. CAS-14 – Cost Accounting Standard on Pollution Control Cost
15. CAS-15 – Cost Accounting Standard on Selling and Distribution Overheads
16. CAS-16 – Cost Accounting Standard on Depreciation and Amortisation
17. CAS-17 – Cost Accounting Standard on Interest and Financing Charges
18. CAS-18 – Cost Accounting Standard on Research and Development Costs
19. CAS-19 – Cost Accounting Standard on Joint Costs
20. CAS-20 – Cost Accounting Standard on Royalty and Technical Know-How Fee
21. CAS-21 – Cost Accounting Standard on Quality Control
22. CAS-22 – Cost Accounting Standard on Manufacturing Cost
23. CAS-23 – Cost Accounting Standard on Overburden Removal Cost
24. CAS-24 – Cost Accounting Standard on Treatment of Revenue in Cost Statements

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1. CAS-1 – Cost Accounting Standard on Classification of Cost

Objective

The objective of this standard is to bring uniformity and consistency in the principles of Classification of Cost for disclosure and presentation in the cost statements of a product or service.

Scope

This standard shall be applied to cost statements, which require classification, presentation and disclosure of cost including those requiring attestation.

Principles of Classification of Costs

1. By Nature of expenses
2. By nature of traceability to a cost object
3. By function
4. By nature of behaviour
5. By nature of production or operation process.

2. CAS-2 – Cost Accounting Standard on Capacity Determination

Objective

The objective of this standard is to bring uniformity and consistency in the principles and methods of determination of capacity with reasonable accuracy.

Scope

This standard shall be applied to the cost statements, including those requiring attestation, which require determination of capacity for assignment of overheads.

Determination of Capacity

Capacity shall be determined in terms of units of production or services or equivalent machine or man-hours.

1. Installed Capacity
2. Normal Capacity

3. CAS-3 – Cost Accounting Standard on Production and Operation Overheads

Objective

The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the Production or Operation Overheads with reasonable accuracy.

Scope

This standard shall be applied to cost statements, which require classification, measurement, assignment, presentation and disclosure of Production or Operation Overheads including those requiring attestation.

Disclosures

1. The basis of assignment of Production or Operation Overheads to the cost objects
2. Production or Operation Overheads incurred in foreign exchange
3. Production or Operation Overheads relating to resources received from or supplied to related parties
4. Any Subsidy, Grant, Incentive or any amount of similar nature received or receivable reduced from Production or Operation Overheads
5. Credits or recoveries relating to the Production or Operation Overheads
6. Any abnormal cost not forming part of the Production or Operation Overheads
7. Any unabsorbed Production or Operation Overheads

Disclosures shall be made only where material, significant and quantifiable.

4. CAS-4 – Cost Accounting Standard on Cost of Production for Captive Consumption

Objective

The objective of this Standard is to bring uniformity and consistency in the principles and methods of determining the cost of production or acquisition or supply of goods or provision of services as required under the provisions of GST Acts/Rules.

Scope

This standard should be applied to cost statements which require classification, measurement, assignment, presentation, and disclosure of related costs for determination of the following under the relevant provisions of GST Acts/Rules.

1. Determination of cost of production of goods;
2. Determination of cost of acquisition of goods;
3. Determination of cost of supply of goods;
4. Determination of cost of provision/supply of services; and
5. Determination of value of supply of goods or services as per open market value or as per goods or services of like kind and quality.

5. CAS-5 – Cost Accounting Standard on Determination of Average (Equalised) Cost of Transportation

Objective

• To bring uniformity in the application of principles and methods used in the determination of averaged/equalized transportation cost
• To prescribe the system to be followed for maintenance of records for collection of cost of transportation, its allocation/apportionment to cost centres, locations or products
• To provide transparency in the determination of cost of transportation.

Scope

This standard should be applied for calculation of cost of transportation required under any statute or regulations or for any other purpose. For example, this standard can be used for:

• Determination of average transportation cost for claiming the deduction for arriving at the assessable value of excisable goods
• Insurance claim valuation
• Working out claim for freight subsidy under Fertiliser Industry Coordination Committee
• Administered price mechanism of freight cost element
• Determination of inward freight costs included or to be included in the cost of purchases attributable to the acquisition
• Computation of freight included in the value of inventory for accounting on inventory or valuation of stock hypothecated with Banks/Financial Institution etc.

6. CAS-6 – Cost Accounting Standard on Material Cost

Objective

The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the Material Cost with reasonable accuracy.

Scope

This standard should be applied to Cost Statements which require classification, measurement, assignment, presentation and disclosure of Material Costs including those requiring attestation.

7. CAS-7 – Cost Accounting Standard on Employee Cost

Objective

The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the Employee Cost with reasonable accuracy.

Scope

This standard should be applied to cost statements which require classification, measurement, assignment, presentation and disclosure of Employee Cost including those requiring attestation.

8. CAS-8 – Cost Accounting Standard on Cost of Utilities

Objective

The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the Cost of Utilities with reasonable accuracy.

Scope

This standard shall be applied to cost statements which require classification, measurement, assignment, presentation and disclosure of Cost of Utilities including those requiring attestation.

This standard shall not be applicable to the organisations primarily engaged in generation and sale of utilities. This standard does not cover issues related to the ascertainment and treatment of carbon credits, which shall be dealt with in a separate standard.

9. CAS-9 – Cost Accounting Standard on Packing Material Cost

Objective

The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the packing material cost with reasonable accuracy.

Scope

This standard should be applied to cost statements, which require classification, measurement, assignment, presentation and disclosure of Packing Material Cost including those requiring attestation.

10. CAS-10 – Cost Accounting Standard on Direct Expenses

Objectives

The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the Direct Expenses with reasonable accuracy.

Scope

This standard should be applied to Cost Statements, which require classification, measurement, assignment, presentation and disclosure of Direct Expenses including those requiring attestation.

11. CAS-11 – Cost Accounting Standard on Administrative Overheads

Objective

The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the Administrative Overheads with reasonable accuracy.

Scope

The standard should be applied to Cost Statements, which require classification, measurement, assignment, presentation and disclosure of Administrative Overheads including those requiring attestation.

12. CAS-12 – Cost Accounting Standard on Repairs and Maintenance

Objective

The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the Repairs and Maintenance Cost with reasonable accuracy.

Scope

The standard should be applied to Cost Statements, which require classification, measurement, assignment, presentation and disclosure of Repairs and Maintenance Cost including those requiring attestation.

13. CAS-13 – Cost Accounting Standard on Cost of Service Cost Centre

Objective

The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the Cost of Service Cost Centre with reasonable accuracy.

Scope

The standard should be applied to the preparation & presentation Cost Statements, which require classification, measurement and assignment, of Cost of Service Cost Centres including those requiring attestation.

14. CAS-14 – Cost Accounting Standard on Pollution Control Cost

Objective

The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the Pollution Control Costs with reasonable accuracy.

Scope

The standard should be applied to Cost Statements, which require classification, measurement, assignment, presentation and disclosure of Pollution Control Costs including those requiring attestation.

15. CAS-15 – Cost Accounting Standard on Selling and Distribution Overheads

Objective

The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the Selling and Distribution Overheads with reasonable accuracy.

Scope

This standard should be applied to cost statements, which require classification, measurement, assignment, presentation and disclosure of Selling and Distribution Overheads including those requiring attestation.

16. CAS-16 – Cost Accounting Standard on Depreciation and Amortisation

This standard deals with the principles and methods of determining Depreciation and Amortisation Cost.

Objective

The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the Depreciation and Amortisation with reasonable accuracy.

Scope

This standard shall be applied to cost statements which require measurement, assignment, presentation and disclosure of Depreciation and Amortisation,
including those requiring attestation.

17. CAS-17 – Cost Accounting Standard on Interest and Financing Charges

Objective

The objective of this standard is to bring uniformity and consistency in the principles, methods of determining and assigning the Interest and Financing Charges with reasonable accuracy.

Scope

This standard should be applied to cost statements which require classification, measurement, assignment, presentation and disclosure of Interest and Financing Charges including those requiring attestation. This standard does not deal with costs relating to risk management through derivatives.

18. CAS-18 – Cost Accounting Standard on Research and Development Costs

Objective

The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the Research and Development Costs with reasonable accuracy and presentation of the same.

Scope

This standard should be applied to cost statements that require classification, measurement, assignment, presentation and disclosure of Research, and Development Costs including those requiring attestation.

19. CAS-19 – Cost Accounting Standard on Joint Costs

Objective

The objective of this standard is to bring uniformity, consistency in the principles, methods of determining and assigning Joint Costs with reasonable accuracy.

Scope

The standard shall be applied to cost statements which require classification, measurement, assignment, presentation and disclosure of Joint Costs including those requiring attestation.

20. CAS-20 – Cost Accounting Standard on Royalty and Technical Know-How Fee

Objective

The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the amount of Royalty and Technical Know-how Fee with reasonable accuracy.

Scope

This standard should be applied to cost statements, which require classification, measurement, assignment, presentation and disclosure of the amount of Royalty and Technical Know-how Fee including those requiring attestation.

21. CAS-21 – Cost Accounting Standard on Quality Control

Objective

The objective of this standard is to bring uniformity, consistency in the principles, methods of determining and assigning Quality Control cost with reasonable accuracy.

Scope

The standards shall be applied to cost statements which require classification, measurement, assignment, presentation and disclosure of Quality Control cost including those requiring attestation.

22. CAS-22 – Cost Accounting Standard on Manufacturing Cost

Objective

The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the Manufacturing Cost of excisable goods.

Scope

This standard should be applied to cost statements which require classification, measurement, assignment, presentation and disclosure of Manufacturing Cost of excisable goods.

23. CAS-23 – Cost Accounting Standard on Overburden Removal Cost

Objective

The objective of this standard is to bring uniformity, consistency in the principles, methods of determining and assigning Overburden Removal Cost with reasonable accuracy.

Scope

The standard shall be applied to cost statements which require classification, measurement, assignment, presentation and disclosure of Overburden Removal Cost including those requiring attestation.

24. CAS-24 – Cost Accounting Standard on Treatment of Revenue in Cost Statements

Objective

The objective of this standard is to bring uniformity and consistency in the principles and methods for treatment of revenue in cost statements with reasonable accuracy.

Scope

This standard shall be applied to cost statements which require classification, measurement, treatment, assignment, presentation and disclosure of revenue including those requiring attestation.