Isolating Cost Impact. The objective of a cost impact study is to determine the difference in costs allocated to contracts because of changes to one or more cost accounting practices or failure to comply with CAS. Other changes in costs exist, such as reductions in the total amount of overhead incurred or changes that are not changes to a cost accounting practice. For example, if the total estimated indirect costs for a period increase or decrease, this difference is not the result of a change to a cost accounting practice--the difference is simply a change in an amount. Likewise, changes in the accounting system that represent the initial adoption of an accounting practice or changes that consist of partial or total elimination of functions or items of costs are not changes to cost accounting practices.
LEXIS.com subscribers can view this and additional content at 1-7 Accounting Government Contracts - Cost Accounting § 7.02. Current material is also available on The DOD Inspector General's report and criticism of DCMA for CAS administration related to Iraq reconstruction contracts. Further insight is provided on the exemption from CAS for contracts and subcontracts that are executed and performed overseas.
Accounting for Government Contracts--Cost Accounting Standards provides guidance on the applicability of standards and regulations to contractors and contracts; explanation of procedures involved in preparing cost impact proposals; and comprehensive analysis and commentary on each standard along with examples. Federal Acquisition Regulation and significant issues that affect cost accounting standards are also addressed.
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