Part III - Annual TRAC

Section E: Cost adjustments

1. This is part of the pyramid of costs

   Cost attribution to activity
   Time allocation to activity

2. Two cost adjustments should be made to the costs in institutions’ financial statements to produce the full economic cost total used in TRAC. These are the:

   infrastructure adjustment; and

   cost of capital employed

3. Guidance on these is given in Annex 15.
4. A third cost adjustment – exceptional items – was used in the initial introduction of TRAC but no longer applies.
   

End of Section