| Description: |
The model consists of the following information:
1. data requirements (necessary data elements, source of data elements, detailed characteristics of the data, availability of the data)
2. structured organization and relationships of model elements.
3. criteria for detecting business anomalies.
4. methodology for tracing inputs to model components.
5. Model type and intended purpose
Model Structure: The model structure reflects the organization and relationships of responsibility segments and cost objects. It also incorporates attributes which may support grouping, sorting, and reporting in ways not possible with pre-defined organizational and cost object structures. For example, if the cost object being reviewed is a geographic location (i.e. Baltimore), this attributing may provide the ability to view information not only by geographic location, but also by type (i.e. seaport, land port, airport), function, size, jurisdiction, etc.
Responsibility Segments - A responsibility segment is a component of a reporting entity that is responsible for carrying out a mission, conducting a major line of activity or producing one or a group of related products or services. In addition, responsibility segments usually possess the following characteristics:
1. Their managers report to the entity's top management directly; and
2. Their resources and results of operations can be clearly distinguished from those of other segments of the entity.
These two characteristics differentiate responsibility segments from cost objects. A cost object can be at any level of an organization and may not report to the top management directly. A responsibility segment can contain cost objects within itself.
Cost Object - This is an activity or item whose cost is to be measured. In a broad sense, a cost object can be an organizational division, geographical area (e.g., district, region, etc.), cost center, program, activity, task, product, service, customer or asset. Cost objects may be decomposed into lower level cost objects to the extent required.
As an example, the purpose of cost accounting by a responsibility segment is to measure the costs of its outputs. These outputs may be the services or products that the segment produces and delivers, the missions or tasks that the segment performs, or the customers or markets that the responsibility segment serves. There may be intermediate cost objects that are used in the course of the cost assignment process. |