D Murali

When tracking cost, follow ICWAI norms

D. MURALI | Updated on December 18, 2011

BL28BKCOST

BL28BKCOST



If it has been long since you studied costing, a quick refresher can be chapter 3 in ‘ Guide to Cost Accounting Records & Cost Audit' by G. Srinivasan Anand ( www.taxmann.com). The chapter discusses the Cost Accounting Standards (CAS) issued by the Institute of Cost and Works Accountants of India.

For instance, CAS 1 deals with classification of costs, based on nature of expense, traceability, fixed / variable behaviour, time period, and so on. In the case of joint products, joint costs are to be allocated among the products on a rational and consistent basis, the author notes. As for by-products, the net realisable value of the by-products should be credited to the cost of production of the main product, he adds.

A chapter on ‘compliance report' defines a ‘product' as any tangible or intangible goods, material, substance, article, idea, know-how, method, information, object, service, etc., that is the result of human, mechanical, industrial, chemical, or natural act, process, procedure, function, operation, technique, or treatment and is intended for use, consumption, sale, transport, store, delivery or disposal.

It will definitely be of instructional value to practising professionals.

Debtors mentally give up months before you ‘repo'

Is repossessing a difficult and dangerous task? Not necessarily, says Steven F. Coyle in ‘ Debt Collections' ( www.bookmannindia.com), narrating from his ‘repo' experience. “A majority of the equipment I repossessed was from people who didn't accept prior offers of help. They didn't return my calls. They hid during site visits. They didn't want to negotiate payment plans. They swore when I called. It's easy repossessing from such people,” he reminisces.

Those rare customers who do keep in contact, who do accept help, and who do treat you with respect are the most difficult accounts to repossess, the author opines. He observes that by the time it is repo time, most customers know the game is over; and as a creditor it is important for you to know when they have given up.

“Often, debtors will mentally give up months before you repo. They tell others about giving up, but rarely do they tell their creditors. Instead, some will try to use your goods and services to generate some quick income to pay their staff or other creditors before closing the doors.”

It has some insights of value for those on the ‘repo' road.

Published on July 27, 2011

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor