CAS - 07 - G Note - GUIDANCE NOTE ON COST ACCOUNTING STANDARD ON EMPLOYEE COST (CAS-7)

Employee cost rules require gross pay, employer benefits, and traceable assignment to cost objects; exclusions and disclosures mandated.

The guidance requires determination of employee cost by including gross pay, employer cost of benefits, statutory contributions, bonuses and managerial remuneration while excluding imputed costs, penalties, certain prior period compensations and material abnormal costs; it mandates assigning traceable employee costs to cost objects (via time cards, job tickets or factor hours), allocating non traceable costs by equitable bases subject to materiality, amortising separation costs over benefiting periods, and disclosing material items, subsidies, related party payments and changes in cost accounting principles.