Cost accounting for utilities requires separate measurement, traceable assignment, and disclosure of purchased, generated, and abnormal utility costs. Cost Accounting Standard 8 on cost of utilities lays down principles for classifying, measuring, assigning, presenting and disclosing utility costs such as power, steam, water and compressed air. Each utility is to be treated as a distinct cost object, with purchased utility cost measured at purchase cost and self-generated utility cost determined from direct material, employee cost, direct expenses and factory overheads. Finance costs and imputed costs are excluded, while subsidies, credits, abnormal costs and penalties are adjusted or omitted as required.