Cost Accounting and Financial Health: Analysis of Cost Reduction Policy Effect in Selected Enterprises of Metallurgy Industry in Uzbekistan

Abstract

Cost accounting is an emerging trend of business accounting in developing economies. Deep-in-root accounting reforms and advances in business climate involve the cost accounting techniques which could embrace technological, market and financial healthiness factors of a business. As a developing economy, Uzbekistan has been reforming accounting system and developing the coverage of accounting in providing financial data in all sectors. Moreover, the government is ensuring cost reduction initiatives to stabilize the price volatility and mitigate the demand shock for particular enterprises. Metallurgic industry, in this line, has been benefiting from this initiative and reducing the output cost within the established target. Cost reduction policy is directly influencing on the cost accounting and costing methods of metallurgic industry enterprises. Consequently, a need for introduction of modern cost accounting techniques to the accounting system has been emerging as a part of accounting system reform. This article examines the relevance of cost accounting by analyzing the effect of cost reduction policy on financial health of selected metallurgy industry enterprises. When it comes to methodology, it was chosen to apply Enyi’s solvency model, which evaluate how the firm gets solvency and this model contains four prime steps.