Cost accounting standards

  • How is accounting standards?

    Accounting standards are authoritative standards for financial reporting and are the primary source of generally accepted accounting principles (GAAP).
    Accounting standards specify how transactions and other events are to be recognized, measured, presented and disclosed in financial statements..

  • How many standards are in CAS?

    CAS consists of nineteen standards numbered 401 to 420 (CAS 419 is reserved.
    They cover a variety of costs such as depreciation, pension plans, personal compensation, indirect costs, etc..

  • Methods of cost accounting

    Cost accounting is a managerial accounting process that involves recording, analyzing, and reporting a company's costs.
    Cost accounting is an internal process used only by a company to identify ways to reduce spending..

  • What do you mean by accounting standards?

    Accounting standards are authoritative standards for financial reporting and are the primary source of generally accepted accounting principles (GAAP).
    Accounting standards specify how transactions and other events are to be recognized, measured, presented and disclosed in financial statements..

  • The following is the text of the COST ACCOUNTING STANDARD 4 (CAS-4) issued by the Council of the Institute of Cost and Works Accountants of India on “COST OF PRODUCTION FOR CAPTIVE CONSUMPTION”.
    The standard deals with determination of cost of production for captive consumption.
  • The standard deals with the principles and methods of measurement and assignment of Joint Costs and the presentation and disclosure in cost statement.
    The objective of this standard is to bring uniformity, consistency in the principles, methods of determining and assigning Joint Costs with reasonable accuracy.

What are the 19 standards and rules of Cost Accounting Standards?

CAS consists of nineteen standards numbered 401 to 420 (CAS 419 is reserved.
They cover a variety of costs such as:

  • depreciation
  • pension plans
  • personal compensation
  • indirect costs
  • etc.
    They ensure uniformity and consistency in measurement (how much), assignment (to which cost accounting period), and allocation (which contract gets charged).
    • ,

    What is cost accounting and what are its objectives?

    Cost accounting is the practice of anticipating for the costs associated to running a business or producing a product. Since many costs can be flexible, it is not an exact science but when dealing with large volumes, the price distortions were generally not very big.

    ,

    What is the purpose of Cost Accounting Standards?

    Cost Accounting Standards (popularly known as CAS) are a set of 19 standards and rules promulgated by the United States Government for use in determining costs on negotiated procurements.
    CAS differs from the Federal Acquisition Regulation (FAR) in that FAR applies to substantially all contractors, whereas CAS applied primarily to the larger ones.

    ,

    Who needs to comply with cost accounting standards?

    Navigating Cost Accounting Standards (CAS) can prove challenging for government contractors.
    CAS are mandatory for use by prime contractors and subcontractors to estimate, accumulate and report costs, and to settle disputes for procurements with the U.S. government unless an exemption applies.


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