Direct expenses standard sets rules for measurement, assignment, presentation, and disclosure in cost statements.

Cost Accounting Standard on Direct Expenses prescribes principles for classification, measurement, assignment, presentation and disclosure of direct expenses in cost statements. Direct expenses are expenses linked to a cost object other than direct material cost and direct employee cost, and must be identified on the basis of economically feasible traceability. The standard provides rules for valuation, amortisation of lump-sum items, exclusion of finance costs and imputed costs, treatment of subsidies, abnormal amounts, penalties and recoveries, and disclosure of material direct expense information in cost statements.

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