IMA® (Institute of Management Accountants) and its Strategic Cost Management Task Force recently released a Statement on Management Accounting (SMA) Exposure Draft, open for public comment, on the topic of managerial costing. The draft, “Developing an Effective Managerial Costing System for Your Organization,” examines managerial costing practices and discusses how managers decide which practices are best for their organizations. All IMA members are invited to submit comments to the draft by November 30, 2018.

Among its most important elements, the draft applies IMA’s Conceptual Framework for Managerial Costing and proposes a six-step process that management accountants can use to develop a costing system appropriate for their management purposes. The process includes:
  • Doing a quick assessment of the current costing system’s effectiveness
  • Analyzing the organization’s strategy and business environment
  • Considering managerial cost modeling concepts
  • Evaluating the current managerial costing practices
  • Designing the appropriate level of costing system complexity for the organization
  • Implementing the new system across the organization
“The business environment is constantly changing but managerial costing practices are generally consistent. The cost information used to support critical management decisions continues to be based on financial accounting numbers that fail to consider the complexities of the business operations,” said Raef Lawson, Ph.D., CMA, CSCA, CPA, IMA vice president of research and policy. “This exposure draft provides a methodology for organizations to develop a costing system that corresponds with management purposes.”

IMA is requesting and accepting commentary regarding any additions or changes to the process and content of the draft, which is available for download on IMA’s website here. Comments on the Exposure Draft should be submitted to