TRAC includes two separate but related costing processes:

Annual TRAC: an annual retrospective attribution and reporting of costs - leads to annual reporting by institutions of the costs of Teaching (split into publicly-funded and non-publicly-funded), Research (similarly split), and Other core institutional activity.

TRAC fEC: the forecast and accounting for full economic costs at a project level. From 2005 all institutions are calculating the full economic costs (fEC) of each research project, on a reliable and comprehensive basis. This is then used to set the price for grants made by Government (the Research Councils and OGDs (Other Government Departments)) and informs the price on projects for other sponsors. The fEC of a project is made up of directly incurred costs, directly allocated costs, and indirect costs. Directly incurred costs are recorded on the basis of actual expenditure. Directly allocated and indirect costs are recorded on the basis of standard costs established at the time of project approval.

TRAC Guidance (for England and Northern Ireland)

http://www.jcpsg.ac.uk/guidance/about.htm

Note that TRAC is essentially a method for allocating costs to identified cost centres and not a form of activity costing. None the less, in developing any activity costing for LIS activities, managers may find it helpful to adopt some of the TRAC definitions (such as charge-out rates for staff), so that the costings framework developed for activity costing can be understood in TRAC terms by the Finance Office.