Cost Accounting Standards (CAS 1 to CAS 24)

Cost Accounting Standards (CAS) are a set of rules and guidelines established to ensure uniformity and consistency in cost accounting practices across industries. These standards help in accurate cost measurement, allocation, and reporting, ensuring transparency and comparability. They are essential for regulatory compliance, cost control, and decision-making. In India, the Institute of Cost Accountants of India (ICAI-CMA) formulates CAS, covering aspects like cost classification, overhead absorption, and material valuation. By standardizing cost accounting principles, CAS helps businesses maintain financial discipline, improve cost efficiency, and provide reliable cost-related information for stakeholders and regulatory authorities.

1. CAS 1 – Classification of Cost: Defines cost classification into direct and indirect costs, fixed and variable costs, and other categories for uniformity.

2. CAS 2 – Capacity Determination: Establishes methods for measuring production capacity to allocate fixed costs accurately.

3. CAS 3 – Overheads: Guides on the classification, allocation, and absorption of overhead costs in an organization.

4. CAS 4 – Cost of Production for Captive Consumption: Specifies valuation methods for goods used internally rather than sold externally.

5. CAS 5 – Determination of Average (Equalized) Cost of Transportation: Standardizes transportation cost allocation methods for internal costing.

6. CAS 6 – Material Cost: Covers material purchase, storage, pricing, and usage for cost accounting purposes.

7. CAS 7 – Employee Cost: Defines employee-related expenses, including wages, benefits, and bonuses for cost allocation.

8. CAS 8 – Cost of Utilities: Prescribes cost measurement and allocation for utilities like electricity, water, and gas.

9. CAS 9 – Packing Material Cost: Establishes accounting principles for packing materials used in production and distribution.

10. CAS 10 – Direct Expenses: Provides guidelines for direct expenses incurred in manufacturing or service operations.

11. CAS 11 – Administrative Overheads: Defines classification, measurement, and allocation of administrative expenses.

12. CAS 12 – Repairs and Maintenance Cost: Standardizes treatment of repair and maintenance costs for assets and machinery.

13. CAS 13 – Cost of Service Cost Centres: Focuses on allocation and absorption of service department costs in production.

14. CAS 14 – Pollution Control Cost: Addresses the costs related to environmental and pollution control measures.

15. CAS 15 – Selling and Distribution Overheads: Covers classification and allocation of marketing, selling, and distribution costs.

16. CAS 16 – Depreciation and Amortization: Specifies the treatment of depreciation and amortization in cost accounting.

17. CAS 17 – Interest and Financing Charges: Defines how to account for interest and finance-related costs.

18. CAS 18 – Research and Development Costs: Provides guidance on cost allocation for R&D activities.

19. CAS 19 – Joint Costs: Establishes methods for allocating costs in joint production processes.

20. CAS 20 – Royalty and Technical Know-How Fees: Standardizes treatment of costs for royalty payments and technical knowledge acquisition.

21. CAS 21 – Quality Control Costs: Covers classification and allocation of costs related to quality control processes.

22. CAS 22 – Manufacturing Cost: Defines the elements of manufacturing costs, including direct and indirect expenses.

23. CAS 23 – Borrowing Cost: Guides cost treatment of interest and finance charges incurred on borrowed funds.

24. CAS 24 – Treatment of Revenue in Cost Statements: Provides guidelines on recognizing and accounting for revenue in cost accounting.