On February 10, 2008, Contractor I contributes $700,000 in cash to satisfy the principal and interest payment for the ESOP loan for FY 2007. On March 1, 2008, the ESOP allocates the 10,000 shares to individual employee accounts satisfying the 2007 obligation. The 10,000 shares of stock must be assigned to FY 2007 (these shares cannot be assigned to 2008). (4) If an award is made in the form of an asset other than cash, the cost of deferred compensation for such award shall be based on the market value of the asset at the time the award is made. (5) In computing the present value of the future benefits, the discount rate shall be equal to the interest rate as determined by the Secretary of the Treasury pursuant to Public Law 92–41, 85 stat.
(3) Labor or material costs identified specifically with one of the particular cost objectives listed in paragraph (d)(3) of this subsection shall be accounted for as direct labor or direct material costs. Whenever average cost or pre-established rates for labor are used, the variances, if material, shall be disposed of at least annually by allocation to cost objectives in proportion to the costs previously allocated to these cost objectives. Alternatively, where settlement will consist of a series of payments over an indefinite time period, as in workmen’s compensation, the contractor may follow a consistent policy of recognizing only the actual amounts paid in the period of payment. (6) If the award is made under a plan which requires irrevocable funding for payment to the employee in a future cost accounting period together with all interest earned thereon, the amount assignable to the period of award shall be the amount irrevocably funded. (b) The cost of money rate for any cost accounting period shall be the arithmetic mean of the interest rates specified by the Secretary of the Treasury pursuant to Public Law 92–41 (85 stat. 97).
If the effect of the combined plans is to provide defined-benefits for the plan participants, the combined plans shall be treated as a defined-benefit plan for purposes of this Standard. (iv) If any assumptions are changed during an amortization period, the resulting increase or decrease in unfunded actuarial liability shall be separately amortized over no more than 30 years nor less than 10 years. (10) Defined-benefit pension plan means a pension plan in which the benefits to be paid or the basis for determining such benefits are established in advance and the contributions are intended to provide the stated benefits. (1) A Government contract requires use of electronic tubes identified as “W.” The contractor expects to receive other contracts requiring the use of tubes of the same type.
(4) If the terms of the award require that the employee perform future service in order to receive benefits, the cost of the deferred compensation shall be appropriately assigned to the periods of current and future service based on the facts and circumstances of the award. The cost of deferred compensation for each cost accounting period shall be the present value of the future benefits of the deferred compensation calculated as of the end of each such period to which such cost is assigned. The quotients of cost of money for the cost accounting period (Col. 5) separately divided by the corresponding overhead or G&A expense allocation bases (Col. 6). This factor represents the cost of money applicable to facilities capital allocated to each unit of measure of the overhead or G&A expense allocation base.
can be allocated to a cost centre or cost object in an economically feasible way then it is called
Line management is considered to consist of management or supervision of a segment or group of segments as a whole. (5) Tangible capital asset means an asset that has physical substance, more than minimal value, and is expected to be held by an enterprise for continued use or possession beyond the current accounting period for the services it yields. (b) The following examples are illustrative of application of cost accounting practices which are deemed not to be consistent. (a) The following examples are illustrative of applications of cost accounting practices which are deemed to be consistent. (2) Actual cost means an amount determined on the basis of cost incurred (as distinguished from forecasted cost), including standard cost properly adjusted for applicable variance. As consumers who pay for goods and services, we try to make sense of cost information, in particular as it relates to the prices we pay for things.
(b) A contractor incurs, and separately identifies, as a part of his manufacturing overhead, certain costs which are expressly unallowable under the existing and currently effective regulations. The purpose of this standard is to require that each type of cost is allocated only once and on only one basis to any contract or other cost objective. The criteria for determining the allocation of costs to a product, contract, or other cost objective should be the same for all similar objectives.
This standard should be applied to cost statements which require classification, measurement,
This Standard will increase the likelihood of achieving objectivity in the allocation of expenses to final cost objectives and comparability of cost data among contractors in similar circumstances. (i) Estimates of service life, consumption of services, and residual value shall be reexamined for tangible capital assets (or groups of assets) whenever circumstances change significantly. The charging rate includes an allowance for compensated personal absence based on average experience. As the employee performs services, the related cost objectives are charged for the services at the charging rate, the employee is paid at his base rate, and the excess is credited to the accrued liability for each benefit. The amount of each accrued liability is adjusted at the end of the cost accounting period, and any difference is adjusted through appropriate overhead accounts in accordance with company policy.
(5) Final cost objective means a cost objective which has allocated to it both direct and indirect costs, and, in the contractor’s accumulation systems, is one of the final accumulation points. (2) Company Y estimates service life for tangible capital assets by grouping assets of the same general kind and with similar service lives. In accordance with the provisions of the Standard, Company Y shall use a life of 12 years for the acquisition unless it can support a different estimate for the entire group. (b) Company B has a vacation plan similar to Company A’s, but Company B does not pay pro-rata vacation pay on lay-off for service since the last anniversary date.
- The purpose of this Standard is to improve, and provide uniformity in, the measurement of costs of vacation, sick leave, holiday, and other compensated personal absence for a cost accounting period, and thereby increase the probability that the measured costs are allocated to the proper cost objectives.
- (1) For defined-benefit pension plans other than those accounted for under the pay-as-you-go cost method, the amount of pension cost of a cost accounting period shall be determined by use of an immediate-gain actuarial cost method.
- It excludes incidental interest, dividends, royalty, and rental income, and proceeds from the sale of assets used in the business.
- (3) A transitional cost accounting period other than a year shall be used whenever a change of fiscal year occurs.
- (1) A facilities capital cost of money factor shall be determined for each indirect cost pool to which a significant amount of facilities capital has been allocated and which is used to allocate indirect costs to final cost objectives.
(3) The method selected for valuing pension plan assets shall be consistently applied from year to year within each plan. (19) Segment means one of two or more divisions, product departments, plants, or other subdivisions of an organization reporting directly to a home office, usually identified with responsibility for profit and/or producing a product or service. The term also includes those joint ventures and subsidiaries (domestic and foreign) in which the organization has less than a majority ownership, but over which it exercises control. A participant whose employment status with the employer has not been terminated is an active participant of the employer’s pension plan.
of employee. This is also known as Labour Cost.
The net book value of items of facilities capital which are held or controlled by the home office shall be allocated to the business unit on a basis consistent with the home office expense allocation. (i) The determination of the actuarial accrued liability shall be made using the accrued benefit cost method. The actuarial assumptions employed shall be consistent with the current and prior long term assumptions used in the measurement of pension costs. If there is a pension plan termination, the actuarial accrued liability shall be measured as the amount paid to irrevocably settle all benefit obligations or paid to the Pension Benefit Guarantee Corporation. (1) The home office of Segment H separately allocates to benefiting or causing segments significant home office expenses of staff management functions relative to manufacturing, staff management functions relative to engineering, central payment of health insurance costs, and residual expenses. Segment H receives these expenses as separate allocations and maintains three indirect cost pools; i.e., G&A expense, manufacturing overhead, and engineering overhead; all home office expenses allocated to Segment H are included in Segment H’s G&A expense pool.
Contractors or subcontractors that become subject to the Standard, as amended, during the Pension Harmonization Transition Period shall recognize the change in cost accounting method in accordance with paragraphs (a) and (b). (ii) Provide information as to the basis and rationale used for retaining or revising such assumptions for use in the ensuing cost accounting period(s). (ii) a modification of the accrued benefit cost method that considers projected compensation levels. (11) Defined-contribution pension plan means a pension plan in which the contributions are established in advance and the benefits are determined thereby. (b) The cost of units of a category of material may be allocated directly to a cost objective provided the cost objective was specifically identified at the time of purchase or production of the units.
Abnormal cost: An unusual or atypical cost whose occurrence is usually irregular and
(v) Pronouncement of the exposure draft as ‘standard’ after giving due consideration to the suggestions and modification generated on the circulated exposure drafts from such individuals and agencies as mentioned in (iii) above. Job roles of CMAs include Financial Planning and Analysis, Cost Management, Financial Reporting, Strategic Planning, Risk Management, etc. CMAs are considered fit for Financial Accounting, Cost Accounting as well as Management Accounting, the latter two being their domain of expertise. Some CMAs are engaged in public practice work, others work in the private sector and some are employed by government bodies. The Mission Statement of ICMAI as per the prospectus is “The CMA Professionals would ethically drive enterprises globally by creating value to stakeholders in the socio-economic context through competencies drawn from the integration of strategy, management and accounting.”
The standards serve to provide guidance, support, and improved communications between the government and Congress as well as the public taxpayers. The Indian Accounting Standards (IFRS) has been created by the ICAI so that financial reporting is unified and investors are safeguarded. These standards explain what to include in accounting policies and reports, like auditor duties and how to show certain expenses and income. IFRS applies to all types of businesses, including corporations, partnerships, and even just one person. They are based on an international framework called International Financial Reporting Standards (IFRS). (1) The business unit’s written policy classifying costs as direct or indirect shall be in conformity with the requirements of this Standard.
Because the affected contractors and subcontractors are those who are already subject to CAS but for the (b)(14) overseas exemption, and those who are subject to only CAS 401 and 402 under the (b)(4) foreign concern exemption, the economic impact of this final rule on contractors and subcontractors is expected to be minor. As a result, the CAS Board has determined that this final rule will not result in the promulgation of an “economically significant rule” under the provisions of Executive Order 12866, and that a regulatory impact analysis is not required. For the same reason, the Administrator of the Office of Information and Regulatory Affairs has determined that this final rule is not a “major rule” under the Congressional Review Act, 5 U.S.C. chapter 8. Finally, this rule does not have a significant effect on a substantial number of small entities because small businesses are exempt from the application of the Cost Accounting Standards. Therefore, this final rule does not require a regulatory flexibility analysis under the Regulatory Flexibility Act of 1980, 5 U.S.C. chapter 6.
storage and handling, plant supervision and engineering. In the early nineteenth century, these
The goal of IND-AS is to provide Indian organizations with a set of guidelines and principles to follow when it comes to recording and presenting financial information. This gives more clarity in how companies report their money, making surefinancial statements show a true and fair view of the company’s money situation. Some companies have had to start using IND-AS from April 1, 2016 and some are choosing to use it even though they don’t have to.
The application of these criteria should increase the probability that insurance costs are allocated to cost objectives in a uniform and consistent manner. All stock or cash that is allocated to the individual employee accounts between the end of the cost accounting period and the tax filing date for that period must be assigned to the cost accounting period in which the employee is awarded the stock or cash. This stock shall retain the value established when it was originally purchased by or otherwise made available to the ESOP.
If no interest is included in the award, the amount of the future benefit is the amount of the award. (c) If the cost of deferred compensation can be estimated with reasonable accuracy on a group basis, including consideration of probable forfeitures, such estimate may be used as the basis for measuring and assigning the present value of future benefits. (2) The deferred compensation award is to be satisfied by a future payment of money, other assets, or shares of stock of the contractor. The expense allocated to individual business units above includes depreciation and amortization as reflected in Table V. (3) Facilities capital means the net book value of tangible capital assets and of those intangible capital assets that are subject to amortization.
- (a) The purpose of this Cost Accounting Standard is to provide criteria for the accounting for acquisition costs of material.
- (2) The cost accounting treatment to be accorded such identified unallowable costs in order to promote the consistent application of sound cost accounting principles covering all incurred costs.
- (3) The generally accepted cost accounting principles as laid down by ICWAI are universal in nature, SAP has the flexibility to meet the same.
- Contractors shall allocate pension costs to each segment having participants in a pension plan.
- (3) In the absence of a determinable liability, in accordance with paragraph (b)(1) of this subsection, compensated personal absence will be considered to be earned only in the cost accounting period in which it is paid.
However, the actuarial value of the assets produced by the method used shall fall within a corridor from 80 to 120 percent of the market value of the assets, determined as of the valuation date. If the method produces a value that falls outside the corridor, the actuarial value of the assets shall be adjusted to equal the nearest boundary of the corridor. (4) The Silvertone Corporation separately computes pension costs for Segment 1, and computes pension costs for Segments 2 through 7 in the aggregate. (i) Funding at cost accounting standards in india less than the foregoing levels shall result in proportional reductions of the amount of assigned cost that can be allocated within the cost accounting period. (5) Material inventory record means any record used for the accumulation of actual or standard costs of a category of material recorded as an asset for subsequent cost allocation to one or more cost objectives. (c) Contract III—Since this contract was awarded after January 1, 1978, the G&A expense pool shall be allocated to this contract using a cost input base.