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Commercialpedia Indian Railways commercial circulars and policies

ICWAI Management AccounƟng Research FoundaƟon

Study materialtrain-services

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Date	2019-06-24
Type	Commercial Circular
Topic	train-services

Summary

optimal decisions 1.10.1 Cost Driver: Cost Driver is the one which drive the cost i.e causes the cost to

Text of the circular

Modified Report on
Performance CosƟng System in
Indian Railways
ICWAI Management AccounƟng Research FoundaƟon
(ICWAI – MARF)
Promoted By:
  The InsƟtute of Cost Accountants of India
(Statutory body under an Act of Parliament)

Modified Report on
Performance CosƟng System in
Indian Railways
ICWAI Management AccounƟng Research FoundaƟon
(ICWAI – MARF)
Promoted By:
  The InsƟtute of Cost Accountants of India
(Statutory body under an Act of Parliament)

ICWAI – MARF 
 Modified Report on Performance Costing System 
 
IR - PCS 
Contents 
 
Chapter 1 
: 
Approach of PCS in Indian Railways 
1.1 
Forward Looking Approach for Transformation in Indian Railways ---------------------- 1 
1.2 
Accounting Reforms and need for upgradation of Costing System ---------------------- 2 
1.3 
Global Scenario of Railway Traffic Costing ---------------------------------------------------- 3 
1.4 
Task of Upgradation of Costing System in Indian Railways ------------------------------- 6 
1.5 
Performance Costing System and Target Outcome ----------------------------------------- 7 
1.6 
Prime Considerations for Performance Costing System ( PCS) -------------------------- 8 
1.7 
Existing Accounting Base and Performance Costing Model ------------------------------- 9 
1.7.1 
Existing Financial Accounting System ----------------------------------------------- 9 
1.7.2 
Activities in Divisions/Workshops & Zones ----------------------------------------- 9 
1.7.3 
Existing Costing System --------------------------------------------------------------- 10 
1.7.4 
Upgradation of the System through basic design parameters ---------------- 10 
1.8 
Activity Cost Centre Code (ACC code) --------------------------------------------------------- 11 
1.8.1 
Activity Cost Centre --------------------------------------------------------------------- 11 
1.8.2 
Structure of ACC Code ----------------------------------------------------------------- 11 
1.8.3 
Examples of ACC Code ---------------------------------------------------------------- 12 
1.8.4 
Nature of Activity Centers ------------------------------------------------------------- 13 
1.8.5 
ACC code & System Integration ----------------------------------------------------- 13 
1.8.6 
Simple Extraction of Cost Data from Finance Database ----------------------- 13 
1.9 
Line of Business & Line of Service -------------------------------------------------------------- 14 
1.9.1 
Line of Business & Line of Service -------------------------------------------------- 14 
1.9.2 
LOB & LOS design ---------------------------------------------------------------------- 14 
1.9.3 
Gauge wise Segregation of Cost ---------------------------------------------------- 16 
1.10 
Cost Driver for Cost Segregation ------------------------------------------------------------------ 16 
1.10.1 Cost Driver -------------------------------------------------------------------------------- 16 
1.10.2 Compilation of Cost Driver Input Data ---------------------------------------------- 17 
1.10.3 Joint Cost & Cost Distribution -------------------------------------------------------- 17 
1.10.4 The Nature of Some Cost Drivers ---------------------------------------------------- 17  
1.10.5 Cost Driver for LOS --------------------------------------------------------------------- 18 
1.10.6 Peculiarities of Some Cost Drivers -------------------------------------------------- 18 
1.10.7 Cost driver through IT Integration --------------------------------------------------- 19 
1.10.8 Cost Distribution at Divisional Level ------------------------------------------------- 19 
1.10.9 Proposal of Additional Accounts Heads -------------------------------------------- 21

ICWAI – MARF 
 Modified Report on Performance Costing System 
 
IR - PCS 
1.11 
Commodity wise Goods Service Cost: Cost Drivers ------------------------------------------ 21 
1.12 
Functional Component Cost and its Significance --------------------------------------------- 23 
1.13 
Dis

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