Conceptual Framework for Managerial Costing : Report of the IMA Managerial Costing Conceptual Framework Task Force

There is substantial confusion about what is the best or most appropriate approach for organizations to measure and report costs for managerial decisions. One would think that now in the 21st century this situation would be resolved, but debates continue, even among management accountants, about which approach to use. For example, some criticize standard costing as outdated; some advocates of lean accounting criticize activity-based costing; and some advocates of activity-based costing criticize a variation of it, time driven activity-based costing. What is needed to put an end to these rivalries is not a board of experts to choose the “best” approach, but instead a defined framework for costing that is independent of specific approaches, and enables organizations to determine for themselves what cost information best serves their needs. Then they can evaluate approaches using the independent framework and determine which costing approach will best model their organization and operations to measure costs. Facilitating this breakthrough in managerial costing is the purpose of this document