Abstract
Purpose - The main aim of the study is to present and discuss an accounting innovation in the cost measurement system of rail transport companies. Design/methodology/approach - We identify the main distinctive features that cost accounting systems should have in order to capture the particular structure of the production process of these companies. We therefore develop an innovative accounting practice to take into account the specific features of railway services—in particular, the presence of high fixed costs associated with the infrastructures, a characteristic that is common to other companies operating in a network system (e.g., utilities companies). This specific accounting practice has been applied to Trentino Trasporti, a medium-sized, privately owned passenger railway company operating in the Trentino Alto Adige region, Italy. Findings - Evidence suggests that the new accounting practice allows the operational connection between the company’s resources and their consumption during the provision of transport services. Practical implications - Such connection enables the identification of new opportunities for improvement and for cost optimisation thanks to the possibility of finding the real origins of cost consumption in the rail transport provision. Originality/value - The case study analysed highlights that the ABC system, despite its effectiveness, is not able to fully satisfy the information needs of rail companies. Thus, we propose the adoption of a new practice that takes into consideration the specific features of railway services—in particular, the high fixed costs associated with the infrastructures, a characteristic that is common to other companies operating in a network system (e.g., utilities companies). We believe that the cost accounting system proposed can support the rail transport companies in managing the requirements of the liberalisation process.
Purpose - The main aim of the study is to present and discuss an accounting innovation in the cost measurement system of rail transport companies. Design/methodology/approach - We identify the main distinctive features that cost accounting systems should have in order to capture the particular structure of the production process of these companies. We therefore develop an innovative accounting practice to take into account the specific features of railway services—in particular, the presence of high fixed costs associated with the infrastructures, a characteristic that is common to other companies operating in a network system (e.g., utilities companies). This specific accounting practice has been applied to Trentino Trasporti, a medium-sized, privately owned passenger railway company operating in the Trentino Alto Adige region, Italy. Findings - Evidence suggests that the new accounting practice allows the operational connection between the company’s resources and their consumption during the provision of transport services. Practical implications - Such connection enables the identification of new opportunities for improvement and for cost optimisation thanks to the possibility of finding the real origins of cost consumption in the rail transport provision. Originality/value - The case study analysed highlights that the ABC system, despite its effectiveness, is not able to fully satisfy the information needs of rail companies. Thus, we propose the adoption of a new practice that takes into consideration the specific features of railway services—in particular, the high fixed costs associated with the infrastructures, a characteristic that is common to other companies operating in a network system (e.g., utilities companies). We believe that the cost accounting system proposed can support the rail transport companies in managing the requirements of the liberalisation process.