Normal costing methods and an application within the scope of accounting standards

One of the innovations in the Turkish Accounting Standarts (TR IAS) /Turkish Financial Reporting Standards (TR IFRS) has brought to accounting applications is applying the normal cost method for cost calculation methods. In our country, based on Tax Procedure Law (TR TPL); although the full cost method is used for cost calculation, the normal cost method should be used under the TR IAS/ TR IFRS administration. Addition to this, from January 1st, 2018, in the Financial Reporting Standard for Large and Medium-Sized Enterprises (FRS for LMSE) which is applicable to the businesses that carry out certain criteria and do not apply TR IAS/ TR IFRS while being liable to independent auditing, normal cost method is offered as an alternative to full cost method. When the full cost method embarks all manufacturing costs to direct manufacturing cost without any classification, the normal cost method embarks fixed production cost to the total cost based on used capacity. One can suggest that the normal cost method is more reliable and presents more valid results because it may inhibit the sudden cost fluctuations caused by the production costs belonging to the normal cost method's unused capacity. This study's aim is to bring awareness by revealing the effect of TR IAS/ TR IFRS's anticipation of normal cost method on businesses' cost calculation system, accounting applications, and results of activities. In our study, the case study method is applied by using the data from a manufacturing company. Our thesis includes three parts. In the first section, the conceptual framework and cost calculation methods are explained thoroughly. In the second section, the normal cost method under the cost calculation method is investigated in detail. In the third section, cost calculation is conducted based on the normal cost method, using the data from a manufacturing company based on Aegean Region, compared with the results of the full cost method, and lastly, income statement is presented to see the differences between these methods. Besides, the company's accounting records are presented under the normal cost method. Keywords: Costing Methods, Full Cost Method, Normal Cost Method, Normal Capacity, TR IAS-2, FRS for LMSE: Section 6.