New IFAC Publication Explains How Better Costing Can Result in Better Management Decision-Making

    Filter By


    Press Releases/News Alerts

    Jul 23, 2009
    New York


    PAIB Committee


    Find more news & events related to:
    PAIB, financial and performance management

    Keep Updated
    Get the latest news delivered to your inbox.

    Get the latest updates delivered straight to your inbox

    New IFAC Publication Explains How Better Costing Can Result in Better Management Decision-Making

    The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) has released a new International Good Practice Guidance publication, Evaluating and Improving Costing in Organizations, which establishes six fundamental principles that can help professional accountants and their organizations to evaluate and improve their approach to costing. The guidance recognizes the importance of distinguishing between the purposes and information needs of cost accounting to meet the demands of external reporting, cost measurement, and reporting for internal decision support. A companion document, Costing Levels Maturity Model, has also been published to help professional accountants decide what level of costing sophistication to use given organizational requirements and the needs of managers and employees.

    "Professional accountants have a significant role to play in ensuring that they, and the costing models and systems they use, provide relevant information and analysis to support performance evaluation and planning and management decisions," says Roger Tabor, Chair of the PAIB Committee. "Good costing information is essential to interpret and analyze past performance. And it can be used predictively to guide decisions about many aspects of an organization's future operations. These activities are different, and the guidance is designed to help professional accountants provide valuable information to their management customers."

    This IFAC guidance is targeted to professionals working in commerce and industry, as well as the public sector, education, and the not-for-profit sector. It recognizes that, when used effectively, costing can provide clear and timely information. The guidance cautions, however, that all cost information is not created equal: Highly aggregated cost information, for example, which is compiled for external reporting purposes, may not reflect such relationships closely enough to support future strategic and operational decisions.    

    The new Costing Levels Maturity Model can also help professional accountants exercise professional judgment to assess their organization's existing costing capability for supporting internal managerial analysis and decisions. The PAIB Committee seeks comments from professional accountants and IFAC member bodies on the model to help its continued development.

    Evaluating and Improving Costing in Organizations and Costing Levels Maturity Model can be downloaded free of charge from the PAIB section of the IFAC online bookstore at The PAIB Committee welcomes all feedback, which can be emailed to

    About IFAC

    IFAC ( is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 157 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce.


    Related Resources


Important Note: Please read our website Terms of Use.

ALL RIGHTS ARE RESERVED. You may not reproduce, store or transmit in any form or by any means, electronic or otherwise, including photocopying, recording, or storage in any type of reference or information retrieval system, nor may you translate, modify or create derivative works or adaptations based on the text of any file, or any part thereof, without the prior written permission of the International Federation of Accountants (IFAC). Please direct permission requests to See also Permissions Information.