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Implicit cost

11 August 2020

according to economics implicit cost should not be recorded in the books of accounts.But why partners salary is included in p and l appropriation account?

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3 Replies

Asha Kanta Sharma (Manager - Finance & Accounts) (10524 Points)
Replied 11 August 2020

https://www.caclubindia.com/forum/implicit-cost-553761.asp?offset=0

bsai partish (166 Points)
Replied 11 August 2020

I have gone through a point that :
if industries use raw materials from natural resources then those materials are not treated as raw materials.
what is ur opinion on this?

Asha Kanta Sharma (Manager - Finance & Accounts) (10524 Points)
Replied 15 August 2020

Natural resources will be treated as raw materials and all the cost associated with extraction, collections, transport of the same will be considered as Direct Cost. Cost involved for procuring License Fee for such activity should also be considered as Business Cost.