Exposure Draft: Conceptual Framework for Managerial Costing

The IMA Managerial Costing Conceptual Framework Task Force welcomes comments on its newly released Conceptual Framework for Managerial Costing exposure draft. The deadline for comments is September 24, 2012.

The Conceptual Framework for Managerial Costing seeks to define the principles, concepts, and constraints for costing efforts that support managerial decision making within an organization. The aim of the Conceptual Framework is to assist management accountants and financial professionals to design and compare costing approaches in order to create cost information that reflects the operations and economics of an organization and helps it achieve its strategic objectives. The Conceptual Framework does not address the use of costing for financial accounting or regulatory financial reporting purposes.

Those commenting are asked to refer to specific page numbers and topics related to their comments, provide the reasons behind their proposed changes, and, where appropriate, offer explicit suggestions for proposed changes to the wording. Note: The Conceptual Framework defines the specific terms for the proposed principles, concepts, and constraints. Readers and comments should use the definitions in the Framework rather than plain language definitions.

Comments are welcome from management accounting professionals, academics, and professional associations. The Task Force would like to encourage management accountants in business and industry in particular to comment. We are interested in practitioners’ views on the effectiveness of the Framework in supporting improved costing efforts, providing a new frame of reference for costing inside an organization, and serving as a source of general managerial costing information and guidance.

Guidance for those commenting:

1.     Is managerial costing clearly defined in the Introduction (p. 7)?

2.     Is the Objective statement (p. 13) clear and applicable to the use of cost information for internal organizational decision making?

3.     Does Section II, Scope of Managerial Costing, adequately define the coverage of the framework?

4.     Do the principles, concepts, and constraints in the Framework capture the elements needed to support highly effective costing for managerial decisions inside an organization?

5.     Would you propose any other principles, concepts, or constraints? Please explain your reasoning.

6.     Are the principles, concepts, and constraints useful in assessing managerial costing approaches and methods for improving costing in your organization?

7.     Does Section IV, The Framework in Operation, help clarify the application of the Framework?

8.       Did the Appendix, Truth as a Basis for Managerial Costing, help you to better understand the Conceptual Framework?

Please submit comments (as a Word file attachment) to CFMCcomment@imanet.org.

The deadline for comments is September 24, 2012.