This section will address the areas of cost and pricing with respect to allowable and unallowable costs and will cover topics but not limited to: - Cost Principles and Selected Areas of Cost - Applicability of CAS (Cost Accounting Standards) - and more...
Cost Allowability (FAR 31)
Inquiry: We were wondering if the following were allowable: 1. Taking an established client to lunch 2. Taking a potential client to lunch 3. Lunches bought during training away from the office Response: It Depends! There are several cost principles you must look at to determine if the specific type
Cost Allowability (FAR 31)
FAR 31.205-6(a)(6)(ii) states compensation to owners must be reasonable for the personal services rendered, and not be a distribution of profits. Therefore, it appears that distribution of profits is not an allowable contract cost. However, payments made to owners are Not Automatically Unallowable if the payments
Cost Allowability (FAR 31)
Inquiry: I wonder if you could help with a related problem/question. We're a staffing company and provide temps to Federal agencies on a per hour basis. The question relates to Overtime. Obviously we pay the employee time and a half for overtime work. Does the FAR address
Cost Allowability (FAR 31)
Lets look a little closer at the basic guidance. Then you must make a determination on activities cost allowability and be prepared to support your conclusion. Employee Welfare and Morale Expense - Employee welfare and morale expenses are costs incurred on activities to improve working conditions, employer-employee relations, employee morale,
Cost Allowability (FAR 31)
These costs can and have been disallowed. Will yours? A firm in one of our workshops stated that a DCAA auditor disallowed her consulting costs. Based on what she shared with the class it sounded like the cost was allowable. More information was needed so the firm is going to
Cost Allowability (FAR 31)
Inquiry: Can you charge the government for a contingent fee or commission to be paid to a firm for bringing in new business? This is a valid question. Especially for those of us small businesses who find it hard to find the time to market for ourselves and does not
Cost Allowability (FAR 31)
What are they and can you recover them? Question: Are the costs incurred before the effective date of the contract allowable and therefore chargeable to the contract? You keep me sharp with your practical and insightful questions The answer appears simple enough. Lets start by defining what the types of
Cost Allowability (FAR 31)
Are you covering yourself? Let's talk about how advance agreements can protect you. Due to the many different types of accounting systems and varying contract situations that arise, determining the reasonableness, allocability, and the allowability of certain costs may be difficult to determine. So to avoid possible subsequent
Cost Allowability (FAR 31)
We all must understand Indirect Cost and Rates! It is part of the foundation of our profitability and audit exposure. We cannot learn too much on this subject, but we must learn the right way. The word Indirect confuses so many. Why? Because it is often a matter of preference,
Cost Allowability (FAR 31)
There are many differences of opinion and disputes about whether certain costs should be classified as direct or indirect. In addition, the use of ambiguous terms that are used interchangeably doesn't help the situation. For instance, overhead is used interchangeable in industry with burden, loading, add-on, management cost,
