Production and operation overheads standard sets rules for measurement, assignment, absorption, and disclosure in cost statements. Production or Operation Overheads are regulated through principles for classification, measurement, assignment, presentation and disclosure in cost statements. The standard requires uniform and consistent determination of overheads, defines key concepts such as fixed, variable, semi-variable and imputed costs, and provides rules for overhead absorption, including actual production for variable overheads and normal capacity for fixed overheads. It also requires disclosure of the basis of assignment, related party resources, subsidies, recoveries, abnormal costs, unabsorbed overheads and material changes in accounting principles.