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TaxTMI 
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TaxTMI 
REPAIRS AND MAINTENANCE COST
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....classification, measurement and assignment of repairs and maintenance cost, for determination of the Cost of product or service, and the presentation and disclosure in cost statements. 2. Objective The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the repairs and maintenance cost with reasonable accuracy. 3. Scope This standard should be applied to cost statements which require classification, measurement, assignment, presentation and disclosure of repairs and maintenance cost including those requiring attestation. 4. Definitions The following terms are being used in this standard with the meaning specified. 4.1 Cost Object: An activity, contract, co....
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....pacity is the production achieved or achievable on an average over a number of periods or seasons under normal circumstances taking into account the loss of capacity resulting from planned maintenance.^[2] 4.6 Production overheads: Indirect costs involved in the production of a product or in rendering service. The terms Production Overheads, Factory Overheads, Works Overheads and Manufacturing Overheads denote the same meaning and are used interchangeably. Production overheads shall include administration cost relating to production, factory, works or manufacturing. 4.7 Property, plant and equipment are tangible assets that: (a) are held for use in the production of goods or supply of services, for rental....
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.... cost includes the cost of materials, consumable stores, spares, manpower, equipment usage, utilities and other identifiable resources consumed in such activity. Indirect cost includes the cost of resources common to various repairs and maintenance activities such as manpower, equipment usage and other costs allocable to such activities. 5.2 Cost of in-house repairs and maintenance activity shall include cost of materials, consumable stores, spares, manpower, equipment usage, utilities, and other resources used in such activity. 5.3 Cost of repairs and maintenance activity carried out by outside contractors inside the entity shall include charges payable to the contractor and cost of materials, consumable stores, spares, m....
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.... when they meet the definition of property, plant and equipment and depreciated accordingly. Otherwise, such items are classified as inventory and recognised in cost as and when they are consumed. Example: A company purchased equipment for Rs. 10 crore and insurance spare for Rs. 1 crore. If the company is covered under IndAS, such spare is capitalized as Property, Plant & Equipment. After use for five years, the equipment broke down and a part was replaced with the aforesaid insurance spare. After five years, the depreciated value of equipment is Rs. 5 crore. As property, plant and equipment are depreciated when they are available for use, accordingly the depreciated value of new spare is Rs. 50 lakhs. The old spare was r....
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....able to abnormal reasons shall be excluded from repairs and maintenance cost. 5.13 Subsidy / Grant / Incentive or amount of similar nature received / receivable with respect to repairs and maintenance activity, if any, shall be reduced for ascertainment of the cost of the cost object to which such amounts are related. 5.14 Any repairs and maintenance cost resulting from some abnormal circumstances, if material and quantifiable, shall not form part of the repairs and maintenance cost. Example: Major fire, explosions, flood and similar events are abnormal circumstances referred above. 5.15 Fines, penalties, damages and similar levies paid to statutory authorities or other third parties shall not form part o....
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.... shared by several cost objects, the related cost shall be measured as an aggregate and distributed among the cost objects as per principles laid down in Cost Accounting Standard - 3. 7. Presentation 7.1 Repairs and maintenance cost, if material, shall be presented in the cost statement as a separate item of cost. 7.2 Asset category wise details of repairs and maintenance cost, if material, shall be presented separately. 7.3 Activity wise details of repairs and maintenance cost, if material, shall be presented separately. 8. Disclosures 8.1 The cost statements shall disclose the following: 1. The basis of distribution of repairs and maintenance cost to the cost objects/ cost units. ....