There is no exhaustive definition of cost records given under the law. However in order to understand the provisions surrounding the Cost Accounting Records Rules, CAMAP and AICMAS describe Cost Accounting Records and define them as:-

" The records contemplated under Section 209 (1) (d) of the Companies Act, 1956 would include all the accounting records maintained by the Company and made available for audit by the financial auditor. In addition, the following records would also be required to be maintained:

1.Production

1. Raw Material consumption register/report;
2. Production report;
3. Rejections/wastages/scrap report;
4. Report on stoppage of machines with reasons;
5. Idle time report with reasons;
6. Machine utilization report.

2. Work-in-progress and finished goods

2.1 Process stock register- cost centrewise and product wise;

2.2 Finished goods stock register- productwise.

3. Repairs and maintenance

3.1 Works order register / card showing material and spares consumed and labour utilized;

3.2 In case of workshop, additional records as described under 1 (1) above.

4. Utilities ( steam, power, water)

4.1 Records of input and output;

4.2 Record of cost centrewise allocation of outputs.

5. Raw materials and stores

5.1 Goods received register;

5.2 Bin cards;

5.3 Materials/stores ledgers.

6. Wages and salaries

6.1 Attendance registers/ sheets;

6.2 Wages/salary sheets;

6.3 Leave and gratuity payments.

7. Overheads

Details such as production hours, labour hours, machine hours to facilitate distribution of production.

8. Cost Accounts

8.1 Overheads analysis register;

8.2 Cost centrewise assets register;

8.3 Product ledger;

8.4 Annexures and proformae as per rules;

8.5 Reconciliation of profit/loss as per cost records and financial records.

9. Sales: Sales analysis by products

It should be noted while preparing these records that necessary modifications wherever necessary may be made if nature of production process or industry demand. However such modification shall not be done to the extent that the essence and spirit of the rules are effected or get diluted.

Other than the Cost Auditor who shall require these records for conducting Cost Audit, following authorities place reliance for the confirmation of data in relation to cost of products:

1. Central Excise Department;
2. Anti Dumping wing in the Ministry of Commerce; and
3. Financial auditor to fulfill the requirements under MAOCARO.

The answer is NO. The law as it stands envisages only the inclusion of certain particulars in the books of accounts ( Financial) and as such, maintenance of separate cost records is not contemplated. Since the rules are subordinate to the law the former can not insist on the maintenance of separate cost accounting records.

The Act provides that the books of accounts shall be kept at the registered office of the company. However if the board of directors if so decide, they may be kept at any other place in India. In such a case company shall file with the registrar a notice in writing within seven days of the decision giving the full address of that other place.

There is no specific provision in the rules about the authentication of the records. However in view of demands by the Central Excise authorities, Anti Dumping wing and the requirements under the MAOCARO, it is advisable that such records are authenticated by a Cost Accountant in full time practice on a quarterly basis and kept in the company.

The application of Cost Accounting Records Rules are on the products being manufactured by the company. Therefore every such unit which produces or manufactures the product under reference is covered under the rules and records are required for each of such units. This is further required under Report Rules, where separate certificate for each of the relevant units shall be needed to fulfill the requirements prescribed under the rules.

Time limit for completion of the records is not specified in the Records Rules. However a clue can be taken from the provisions contained in the Report Rules where 90 days from the close of the financial year was specified. This period has now been extended to 135 days.

Institute of Cost and Works Accountants of India has issued four cost accounting standards which specify that:

1. The standards issued by CASB will be recommendatory in nature and every member of the institute is expected to honour the same.
2. As far as maintenance of cost accounting record rules under section 209(1)(d) is concerned, relevant matter covered under the standards, wherever applicable, will be followed.
3. Cost Auditors will adopt and encourage the adoption of the standards, wherever applicable, in maintenance of Cost Accounting Records Rules under Section 209(1)(d) and report deviations, if any, in the Audit Reports under Section 233B.

In view of above it is desirable that guidelines contained in the Cost Accounting standards are followed wherever applicable and a note be given in case of departure being made from the guidelines issued by CASB.

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