Section 8 in The Cost Accounting Records (Chemical Industry) Rules, 2004
(8)The proper records shall be maintained showing the quantity and value of wastage, spoilage, rejections and losses of raw materials, intermediates, process materials, consumable store, small tools and machinery spares, whether in transit, storage, manufacture or at any other stage. The method followed for adjusting the above losses as well as the income derived from the disposal of rejected and waste materials including spoilage, if, any, in determining the cost of product, shall be indicated in the Cost records. Any abnormal wastage or spoilage or rejection or losses shall be indicated distinctly and separately along with reasons thereof.
