| Summary: | The growth in costing Issues usmg conventional accounting methods has led to
approaches like Activity-Based Costing (ABC) being warmly welcomed by both
academic and practising management accountants. The concept of ABC was pioneered
by the manufacturing industries. Its influence has since spread to the service industries.
This study undertakes to examine the potential role of ABC in the public sector,
especially within the Singapore context.
As a foundation, the concept of ABC and the conventional costing method are
introduced and illustrated. The differences between these two approaches are
considered and the contribution of ABC to the effective costing and pricing of an
organization's products/services is highlighted .
There has also been a number of concerns raised about the benefits of ABC techniques
and the potential problems that may arise during ABC implementation. In this regard,
several articles have bee!l written on ABC's applicability in service industries. On the
other hand, little research has been ur.dertaken on the application of ABC in the public
sector, especially within the Singapore context.
The- case study contained m this report shows how The Urban Redevelopment
Authority (IJRA). a key player among the Singapore statutory boards, has adopted an
Activity-Based Costing system. URA is an appropriate choice for this study mainly
because its activities are very important to the community. Hence, the government
would like to assure taxpayers that they are provided with a cost-effective public
service.This report contains a detailed study of the URA . The infonnation wa<> derived from 0
variety of literature sources and a number of interviews conducted with the senior
finance executive of the URA . The project has been undertaken with full support of
the URA .
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