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STANDARD: THE OBJECTIVE IS THAT THE ACCOUNTS DEPARTMENT CAPTURES AND CONSOLIDATES NON TRADING COSTS ASSOCIATED WITH RISK –
UNDER ONE ACCOUNT – THE ‘COST OF RISK ACCOUNT’
THE ACCOUNTANT SHOULD USE THIS FORMAT. FIRSTLY TO CONSOLIDATE STANDARD RISK PREVENTION COSTS, WHICH ARE TRADITIONALLY POSTED TO
SUNDRY SUB ACCOUNTS, AND TO BRING ALL THESE COSTS UNDER ONE NON-OPERATING ‘COST OF RISK ACCOUNT’. SECONDLY, TO CONSOLIDATE EACH
‘DOWN GRADING INCIDENT COST ANALYSIS’ TO CAPTURE RECOVERY COST BOTH DIRECT AND INDIRECT. THESE COSTS WILL ALSO BE POSTED TO THE
‘COST OF RISK ACCOUNT’.
THIS FORMAT SHOULD NOT BE CONSIDERED DEFINITIVE AND SHOULD BE EXPANDED TO SUIT NEEDS. THE FORMAT IS THEREFORE A SUGGESTED FORMAT
TO ADOPT.
REF NO DEPARTMENT
DATE AREA
SOME RISK PREVENTION COST EXAMPLES: INSURANCE PREMIUMS / PURCHASES SECURITY – FIRE EQUIPMENT / FIRE AND SECURITY
REPAIR, REPLACEMENT, REFILLING OR SERVICING EQUIPMENT / TRAINING / SALARIES AND GENERAL ADMIN RECURRING COSTS.
SOME DOWNGRADING INCIDENT RECOVERY COST EXAMPLES: LABOUR COSTS / EQUIPMENT COSTS / MATERIALS AND SPARES
INCLUDING SPOILAGE / PRODUCTION TIME LOSS COSTS / LOSS OF PROFITS / TRAVELING / PRODUCT RECALL
Prepared Approved by: Element GI4.6-001 Page No: Page 2 of 2 Revision No: 00
by: Reference No: