IMA offers guidance on managerial costing models

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The Institute of Management Accountants has issued a new report on developing an effective managerial costing model that builds on the IMA’s Conceptual Framework for Managerial Costing.

The IMA is characterizing its new report as an official Statement on Management Accounting. It discusses a set of principles and concepts organizations can use to create a model of the behavior of resources and operations and their output. Based on the concepts, organizations can improve their managerial costing model by:

  • Assessing the current costing system’s effectiveness;
  • Analyzing the organization’s strategy and business environment;
  • Considering managerial cost modeling concepts;
  • Evaluating current managerial costing practices in the organization;
  • Designing the appropriate level of costing model sophistication for the organization; and
  • Implementing the new cost model across the organization.

The report was written by the IMA’s Managerial Costing Task Force, chaired by Raef Lawson, professor-in-residence and vice president of research and policy at the IMA, who co-authored the report.

“The managerial costing done by companies is often not sufficient to support their internal decision making,” Lawson said in a statement. “Having an effective managerial costing system that meets organizational needs such as operational cost control, financial planning and analysis (FP&A), pricing decisions, and capacity management is critical for organizations to effectively compete in today’s business environment.”

To improve its managerial costing model, the report recommends an organization should perform an initial assessment of its managerial costing system, develop a costing model that’s appropriate for its needs, and then implement a system tailored to its strategic and operational goals and decision-making needs. The IMA contends that most organizations today base their decision-making on inadequate cost models that, while acceptable for external financial reporting, fail to meet the decision-making needs of managers operating in today’s complex business environment.

Separately, the IMA is hosting a Women’s Accounting Leadership Series next month to provide a forum for female professionals in accounting and finance. The main event will take place on Friday, May 3 at Baruch College in New York. The event will include presentations and panels discussing success strategies for aspiring leaders, employment trends for businesswomen, career experiences from female C-suite professionals, and strategies to improve cybersecurity. It will feature Romy Newman, president of Fairygodboss, along with New York-based women leaders from various industries. More information is available here and participants can register here.

On Thursday, May 2, the IMA will host a screening and discussion of the documentary “Equal Means Equal,” which explores the status of women in America and the need for equality. More information about the documentary is available here. To register for the screening, send an email to

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