Reconciliation of Cost & Financial Accounts - Dani Ki Costing - CA IPCC Video Lectures

Reconciliation of Cost & Financial Accounts - Dani Ki Costing - CA IPCC Video Lectures

Reconciliation of Cost & Financial Accounts - Dani Ki Costing - CA IPCC Video Lectures | Reconciliation of Cost & Financial Accounts - Dani Ki Costing - CA IPCC Video Lectures | Reconciliation of Cost & Financial Accounts - Dani Ki Costing - CA IPCC Video Lectures | Reconciliation of Cost & Financial Accounts - Dani Ki Costing - CA IPCC Video Lectures

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Dani Ki Costing
IPCC Video Lectures
Reconciliation of Cost & Financial Accounts
Lecture 1	Part 1
	Part 2
	Part 3
	Part 4
	Part 5
	Part 6
	Part 7
	Part 8
	Part 9
Lecture 2	Part 1
	Part 2
	Part 3
The End

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Reconciliation of Cost & Financial Accounts

The units many a times prepares integrated accounts and many a times non – integrated accounts are also prepared. Integrated accounts means accounts as per costing and as per finance are all in one while in non – integrated accounting separate accounts are maintained as per cost and as per finance. There will always be difference between accounts maintained as per cost and accounts maintained as per finance. To make the cost accounts reliable, reconciliation is made to know the reasons of difference between both accounts.  Reconciliation is numerical in financial in nature.

Reconciliation is required because many items of financial accounts such as income tax, dividends, goodwill, interest, losses on sale of investment etc are not included in cost accounts while items like opportunity cost of capital, notional loss etc which form part of cost account but are not a part of financial accounts. There may be difference in financial and cost accounts due to under or over – absorption of overheads, different base of stock valuation and many other matters. Reconciliation is useful to ascertain correct product cost and ensure correct decision making.

Reconciliation is prepared in three main steps commencing from ascertaining profit as per financial accounts, then ascertaining profit as per cost accounts and at last reconciliation of both profits is made. The only reason behind preparation of reconciliation of cost and financial accounts is the maintenance of non – integrated accounts. It is not required to be prepared when the integrated accounts are prepared as both accounts as per finance and cost is one and the same.