20 October 2013
Dear Sir/Ma'am
please define what is cost record, cost compliance and cost audit? and also tell about the how do you know the applicability of companies for thrice or may be anyone?
20 October 2013
As per CAR rules 2011 shall apply to every company, including a foreign company as defined under section 591 of the Act, which is engaged in the production, processing, manufacturing, or mining activities and wherein,
1. the aggregate value of net worth as on the last date of the immediately preceding financial year exceeds five crores of rupees; or
2.wherein the aggregate value of the turnover made by the company from sale or supply of all products or activities during the immediately preceding financial year exceeds twenty crores of rupees; or
3. wherein the company’s equity or debt securities are listed or are in the process of listing on any stock exchange, whether in India or outside India.
Provided that these rules shall not apply to a company which is a body corporate governed by any special Act;
20 October 2013
Cost Records” means books of account relating to utilisation of materials, labour and other items of cost as applicable to the production, processing, manufacturing or mining activities of the company;
Illustrative List of Cost Records provided for Various Departments are as follows: Production details Raw Material consumption register/report; Production report; Rejections/wastages/scrap report; Report on stoppage of machines with reasons; Idle time report with reasons; Machine utilization report; By-Product & Joint Products. Work-in-progress and finished goods Process stock register- cost centre-wise and product wise; Finished goods stock register- product-wise. Daily Stock Accounts (DSA) maintained under Central Excise Law Repairs and maintenance Works order register / card showing material and spares consumed and labour utilized; Procedure followed for routine maintenance Details major breakdowns & Repairs; Details of Abnormal Repairs & Reconditioning activities. Utilities (steam, power, water) Records of input and output; Record of cost centre-wise allocation of outputs. Raw materials and stores Goods received register; Bin cards; Materials/stores ledgers. Employee Cost Attendance registers/ sheets; Wages/salary sheets; Leave and gratuity payments. Overheads Details such as production hours, labour hours, machine hours to facilitate distribution of overheads; Overheads Keys. Reconciliation of profit/loss as per cost records and financial records.
20 October 2013
Costing records not having any standard format but
It should be for the purpose of Cost compliance report under Companies Cost Accounting Records & Rules 2011.
Under the rules, there is no specified cost books format prescribed, but the Cost Accounting Record Rules contain particulars relating to utilisation of material or labour or other items of cost as may be prescribed to be included in the books of accounts. The broad categories under which the detailed cost records are required are materials, labour, utilities, overheads, depreciation, royalty/technical know-how, research & development expenses, incentives on exports, interest and other borrowing costs, captive consumption, pollution control, inter-company transaction, etc. These rules also contain various proformae to enable the industry to calculate the cost of production and cost of sales effectively.
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