Doubt regarding costing practices

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swati (Querist)
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05 April 2014 The Companies who are giving Compliance services (such as Licensing, compliance services to STPI/EOU units) to other companies, should follow which costing method which should be standard for whole such practices?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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05 April 2014 Costing compliance applicable for service companies also based on nature and turnover. refer CAAR rules

swati

swati (Querist)
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07 April 2014 Sir, i'm still not clear reagrding the query. Kindly suggest some specific method.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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07 April 2014 Basically cost accounting rules not specified any particular method, the method which applied should give to you the proper cost for the service and margin details for the service. if you can mention the clear service nature, i can suggest the method

swati

swati (Querist)
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07 April 2014 Sure sir. Actually the nature of service is of compliance as already mentioned in the query. There are companies who help other companies in complying all the procedures, getting certificates, licenses etc. For such companies what costing method should be appropriate?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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08 April 2014 Basically it is consultancy nature, you can follow the job costing method only. take each client work as one job and assign the related cost to those jobs only and arrive the cost

Cost of Person and professional directly involve those work can be consider as direct cost for those job and other related cost can be consider as indirect cost

in case any common cost like office/admin cost etc, can be absorbed according to the the relevant absorption method or revenue base

swati

swati (Querist)
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09 April 2014 Thank you so much Sir for resolving m query.

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