13-09-2013, 12:04 PM
A presentation on Cost Accounting System for IRCON INTERNATIONAL LTD. New Delhi, India
Cost Accounting System.pdf (Size: 6.43 MB / Downloads: 67)
BACKGROUND
•Construction Industry is covered under
compulsory maintenance of cost records and
to file compliance report at first by way of
MCA notification issued vide GSR 429 (E)
dated June,3, 2011.
•ICAI came out with final guidelines of cost
records maintenance recently.
•Government becoming cost-conscious in
view of various frauds.
•Profitability concept gone – Government is
focusing on cost motivation in view of global
competition.
COST AUDIT
Section 233B (1)- Power to order Cost Audit
The Central Government may, by order, direct that an
audit of cost accounts of the company shall be
conducted in such manner as may be specified in the
order by an auditor (who shall be a cost accountant
within the meaning of the Cost and Works Accountants
Act, 1959(23 of l959)
Pre – requisites
The following step by step approach is required to be
followed by IRCON to do the statutory compliance :
1. Development of a good system of Cost Accounting
in line with applicable Cost Accounting Standards and
Generally Accepted Cost Accounting Principles
(GACAP) issued by the Institute of Cost Accountants
of India (ICAI)
2. Preparation of Cost Accounting Records
3. Online filing of Certificate of Compliance with MCA
in XBRL format
Administration Overheads :
Generally consists of indirect employee costs, office
and administrative expenses of corporate office and
regional offices. These indirect expenses are booked
under administrative overheads and applied to
projects on the basis of project revenue.
Non Cost Items :
These consist of explicit non cost items which are not
considered while arriving at the project wise operating cost and
resultant profitability and carried in the reconciliation
statement, prepared for the purpose of reconciling the profit as
per cost records with the financial profit carried in the audited
profit and loss account.
Sales :
(a) Sales register including foreign projects sales
register
(b) Sales analysis by product mix (size, variety-wise)
The above mentioned cost records shall be maintained
on a regular and continuous basis and not at the end
of the year only