Cost Accounting

Every Company engaged in manufacturing/ Processing/ Producing/ Mining activities and who has either : -

a) Turnover exceeding 20 crores, or

b) Net worth exceeding 5 crores, or

c) is a Listed companies

Shall maintain Cost Accounting records in addition to normal financial records and submit a compliance certificate from a practicing CMA.




“Manufacturing Activity” includes : -
     I.          transformation of raw materials, components, sub-assemblies, or parts into semi-finished or finished products;

   II.           making, altering, repairing, fabricating, generating, composing, ornamenting, furnishing, finishing, packing, re-packing, oiling, washing, cleaning, breaking- up, demolishing, or otherwise treating or adapting any product with a view to its use, sale, transport, delivery or disposal;

  III.           constructing, reconstructing, reconditioning, servicing, refitting, repairing, finishing or breaking up of any products.


“Processing Activity” Includes : -  

     I.        Altering the condition or properties of inputs for their use, consumption, sale, transport, delivery or disposal;

    II.        Accessioning, arranging, describing, or storing products;

  III.        Developing, fixing, and washing exposed photographic or cinematographic film or paper to produce either a negative image or a positive image;

  IV.        Printing, publishing, finishing, perforation, trimming, cutting, or packaging;

   V.        Pumping oil, gas, water, sewage or any other product;

  VI.        Transforming or transmitting, distributing power or electricity;

 VII.        Harboring, berthing, docking, elevating, lading, stripping, stuffing, towing, handling, or warehousing products;

VIII.        Preserving or storing any product in cold storage; or constructing, reconstructing, reconditioning,

  IX.        repairing, servicing, refitting, finishing or demolishing of buildings or structures;

   X.        Farming, feeding, rearing, treating, nursing, caring, and stocking of living organisms;

  XI.        Telecasting, broadcasting, telecommunicating voice, text, picture, information, data or knowledge through any mode or medium;

 XII.        Obtaining, compiling, recording, maintaining, transmitting, holding or using the information or data or knowledge; 

XIII.      Executing instructions in memory to perform some transformation and/or computation on the data in the computer's memory. 


“Production Activity” Includes : -

     I.        Transformation of tangible inputs (raw materials, semi-finished goods, or sub-assemblies) and intangible inputs (ideas, information, know how) into goods or services;

    II.        Manufacturing or processing or mining or growing a product for use, consumption, sale, transport, delivery or disposal;

  III.        Creation of value or wealth by producing goods or services.


“Mining Activity” includes any act, process or method employed in relation to the extraction of ores, minerals, oils, gases or other geological materials from the earth’s crust, including sea bed or river bed.
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