Cost accountancy has now become an essential part of accountancy, which is surprising given that, only a few decades ago, it was very much a part of financial accounting.
The Institute of Cost and Management Accountants (ICMA) defines cost accountancy as follows:
The application of costing and cost accounting principles, methods, and techniques to the science, art and practice of cost control and the ascertainment of profitability. It includes the presentation of information derived therefrom for the purpose of managerial decision-making.
Cost accountancy, as shown in this definition, is a science and an art. It is a science because it is a body of systematic knowledge with specific principles. It is also an art because it requires ability and skill in the application of the principles of cost accountancy to managerial problems.
At the same time, cost accountancy is a practice since it requires the continued efforts of a cost accountant in the field of cost accountancy. One has to have sufficient practical training so as to develop insights and know the intricacies.
Cost accountancy is a broad and diverse field. It includes: