Classification of cost standard sets uniform rules for grouping expenses, presentation, consistency, and disclosure in cost statements. Establishes principles for classification of cost in cost statements for products and services, with the objective of ensuring uniformity and consistency in disclosure and presentation. The standard requires costs to be grouped by nature, traceability to a cost object, function, behaviour and production or operation process, and defines key concepts such as direct and indirect materials, employee costs, expenses, overheads, cost centres, cost objects, prime cost, production overheads, selling overheads, and joint costs. Cost items must be presented on the basis of relevant classification, applied consistently from period to period, and any material change in classification must be disclosed.