Circular on Printing and Distributing the Cost Accounting System for Products of Enterprises (for Trial Implementation)
Circular on Printing and Distributing the Cost Accounting System for Products of Enterprises (for Trial Implementation)
Circular on Printing and Distributing the Cost Accounting System for Products of Enterprises (for Trial Implementation)
Cai Kuai [2013] No.17
August 16, 2013
Relevant ministries and commissions under and relevant agencies directly under the State Council, the finance departments (bureaus) of all provinces, autonomous regions, municipalities directly under the Central Government, the finance bureau of Xinjiang Production and Construction Corps, and relevant enterprises under the administration of the Central Government,
In order to strengthen the cost accounting for products of enterprises, ensure the truthfulness and completeness of the cost information of products and promote sustainable development of enterprises and economic society, the Ministry of Finance (hereinafter referred to as the "MOF"), in accordance with the Accounting Law of the People's Republic of China, Accounting Standards for Business Enterprises and other relevant regulations of the State, has formulated the Cost Accounting System for Products of Enterprises (for Trial Implementation) (hereinafter referred to as the "System"), which is hereby printed and distributed for implementation by large and medium sized enterprises other than those in finance and insurance industry as of January 1, 2014, and the implementation of which by other enterprises is encouraged. Enterprises which implement the System shall no longer implement the Cost Accounting Measures for State-owned Industrial Enterprises.
In case of any problem arising in the implementation thereof, please report to the MOF in a timely manner.
Cost Accounting System for Products of Enterprises (for Trial Implementation)
Chapter I General Provisions
Article 1 The System has been formulated in accordance with the Accounting Law of the People's Republic of China, Accounting Standards for Business Enterprises and other relevant regulations of the State in order to strengthen the cost accounting for products of enterprises, ensure the truthfulness and completeness of the information of products and promote sustainable development of enterprises and economic society.
Article 2 The System shall apply to large and medium sized enterprises, including those in manufacturing, farming, wholesale and retain, construction, real estate, mining, transportation, information transmission, software and IT service, culture and other industries. Other industries which are not expressly covered shall implement with reference to the provisions for the above similar industries.
The System shall not apply to enterprises in finance and insurance industry.
Article 3 For the purpose of the System, products refer to held-for-sale finished products, commodities, labor services or other services provided in the course of daily production and operation activities of enterprises.
For the purpose of the System, the cost of products refers to material cost, employee remuneration and other costs arising in the production process of the products of enterprises, as well as various indirect expenses which cannot be accounted in directly but accounted in as per certain allocation standards.
Article 4 Enterprises shall prepare and carry out cost budget for products of enterprises by virtue of modern information technology, analyze and examine implementation conditions, carry out cost management responsibility system, strengthen the control before, in the mid of and after production, and enhance the basic work of cost accounting and management for products.
Article 5 Enterprises shall correctly differentiate the cost of products and period expenses according to whether relevant expenses are incurred to have products reach current site and position or not.
Article 6 Enterprises shall determine the objects, items and scope of cost accounting for products and timely accumulate, allocate and carry forward relevant expenses according to the characteristics of production process, the type of production and operation organization, the complexity of product types and requirements for cost management.
Once determined, accounting policies and estimation adopted for cost accounting for products of enterprises shall not be changed arbitrarily.
Article 7 Enterprises shall prepare product cost statement on a monthly basis, fully reflecting the production cost, implementation of cost plan, the cost of products of enterprises and changes thereof and so on.
Chapter II Objects of Cost Accounting for Products
Article 8 Enterprises shall, according to characteristics of production and operation and management requirements, determine the objects of cost accounting, accumulate cost and calculate the production cost of products.
Article 9 Manufacturing enterprises generally determine the objects of cost accounting for products according to product types, batch orders, production steps, etc.
1. For products in large quantity under large batch orders and a single production step or for those the information of which concerning the cost of production steps is not required to be provided in terms of management, the objects of cost accounting are generally determined as per product types.
2. For products under small batch orders and produced piece by piece, the objects of cost accounting are generally determined as per each batch or each piece of products.
3. For products processed continually in multiple steps and the information of which concerning the cost of production steps is required to be provided in terms of management, the objects of cost accounting are generally determined as per each type (batch) of products and each production step.
For products with many specifications, the products with similar structures, consumed raw materials and processes may be properly consolidated as the objects of cost accounting.
Article 10 Agricultural enterprises generally determine the objects of cost accounting as per the types, growth periods, and batches (groups) of biological assets, labor work relating to agricultural production, etc.
Article 11 Wholesale and retail enterprises generally determine the objects of cost accounting as per types, batches, orders, categories of commodities.
Article 12 Construction enterprises generally determine the objects of cost accounting as per a single contract concluded. If a single contract covers the construction of several assets, enterprises shall determine the objects of cost accounting of construction contract in the principle of contract split-off stipulated in Accounting Standards for Business Enterprises.
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