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Reconciliation  
Reconcile = Getting two things to correspond/agree. With respect to this topic, it is the process of ensuring that the standard and actual data agree after taking into consideration the data relating to the variances. In this process we prepare a reconciliation statement. What to Reconcile?We reconcile the standard and actual costs. If we go through the formulae for all the material variances, we come across various standard and actual values.We can reconcile any two values whose difference is a variance.
Reconciliation may involve data relating to one or more variancesThe reconciliation between two costs/values may involve the data relating to

How to Reconcile? The Method  
Preparation of a reconciliation statement requires you to start with one of the two costs/values you intend to reconcile and arrive at the other cost/value by adjusting (adding or subtracting) the variances involved.
You may follow the following steps to create the format for the statement.

Reconciliation using Data Relating to More than one variance  
You may follow the following steps to create the format for the statement.

Costs to Reconcile » Variances to be Considered  
The variance that you take into consideration is that variance which can be obtained as a difference of the two costs that you have to reconcile.

Author Credit : The Edifier  ... Continued Page M:15 