The Institute of Cost Accountants of India (ICAI), recognizing the need for structured approach to the measurement of cost in manufacture or service sector and to provide guidance to the user organizations, government bodies, regulators, research agencies and academic institutions to achieve uniformity and consistency in classification, measurement and assignment of cost to product and services, has constituted Cost Accounting Standards Board (CASB) in the year 2001 with the objective of formulating the Cost Accounting Standards (CASs).

The structure of Cost Accounting Standard consists of Introduction, Objectives of issuing standards, Scope of standard, Definitions and explanations of the terms used in the standard, Principles of Measurement, Assignment of Cost, Presentation and Disclosure.

Mandatory applications of Cost Accounting Standards

Statement showing date of mandatory application of Cost Accounting Standards issued by Council of the Institute of Cost Accounts of India is as follows

CAS No.TitleEffective Date(From period of commencing)
CAS-1 (Revised 2015)Classification of Cost1st April 2015
CAS-2 (Revised 2012)Capacity Determination1st April 2012
CAS-2 (Revised 2015)Capacity Determination1st April 2016
CAS-3 (Revised 2011)Overheads1st April 2012
CAS-3 (Revised 2015)Production and Operation Overheads1st April 2016
CAS-4Cost of Production for Captive Consumption1st April 2010
CAS-5Average (Equalized) cost of transportation1st April 2010
CAS-6Material cost1st April 2010
CAS-7Employee Cost1st April 2010
CAS-8Cost of Utilities1st April 2010
CAS-9Packing Material Cost1st April 2010
CAS-10Direct Expenses1st April 2010
CAS-11Administrative Overheads1st April 2010
CAS-12Repairs & Maintenance Cost1st April 2010
CAS-13Cost of Service Cost Centre1st April 2011
CAS-14Pollution Control Cost1st April 2012
CAS-15Selling and Distribution Overheads1st April 2013
CAS-16Depreciation and Amortisation1st April 2014
CAS-17Interest and Financing Charges1st April 2014
CAS-18Research and Development Costs1st April 2014
CAS-19Joint Costs1st April 2014
CAS-20Royalty and Technical Know-How Fee1st April 2014
CAS-21Quality Control1st April 2014
CAS-22manufacturing Cost1st April 2015

In view of the Council Resolutions passed on different dates, the Cost Accounting Standards are mandatory with effect from the period as mentioned above for being applied for preparation and certification of the General Purpose Cost Statements.In case the cost accountant is of the opinion that aforesaid standards have not been compiled with for preparation of Cost Statements, it shall be his duty to make a suitable disclosure/qualification in his audit report/certificate.

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