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Cost accounting of universal postal service

AB Lietuvos paštas carries out cost accounting of universal postal service (UPS) following the requirements set in order No. IV-625 of Director of the Communications Regulatory Authority issued on 1 July 2005 Regarding the Approval of Rules on Cost Accounting of Universal Postal Services Provider. This type of accounting is conducted since the year 2004.

The earlier mentioned requirements of the Communications Regulatory Authority and internal needs of the company are best fulfilled using the accounting system based on the types of activities (Activity Based Costing, hereinafter referred to as “ABC”). Based on the core principles of the ABC methodology, the costs are attributed to certain services taking into account their origin, i.e. types and resources of activities needed for the provision of services. For activity based accounting, since 2008 the company uses special QPR CostPerform software.

With the help of the system used for UPS cost accounting, costs incurred during the accounting period are allocated according to the services based on causality, accumulation, objectivity, sustainability, transparency, publicity, and usefulness principles.

UPS costs are grouped according to these core activities: postal counter and/or collection, distribution, transport, delivery and/or handing in of postal items and other costs.

In order to calculate the overall costs of a certain end-product, Lithuania Post includes direct, indirect, and common costs incurred while providing a single certain service.

Based on the requirements set by the Communications Regulatory Authority, each year Lithuania Post prepares reports on UPS cost accounting and submits them to the Communications Regulatory Authority together with the findings of an independent auditor.