CAS 403 – Allocation of Home Office Expenses to Segments (Part 3 of 3)

*This is Part 3 of a 3-part blog.  Each part addresses the fundamental requirements and techniques for application related to the standard, and provides specific examples. Part 1 addressed the basic requirements/techniques for allocating home office expenses to segments. Part 2 addressed the requirements/techniques for allocating home office residual expenses to segments. This Part 3 will addresses special allocations of home office expenses to segments.   Background:  To provide criteria for allocating home office expenses to the segments of an organization based on the beneficial or causal relationships between the expenses and the receiving segments (CAS 403-20(a)). Special Allocations of Home Office Expenses to Segments   In accordance with CAS 403‑40(c)(3) and CAS 403-50(d), where a particular segment receives significantly more or less benefit from residual expenses … Continue reading

CAS 403 – Allocation of Home Office Expenses to Segments (Part 2 of 3)

*This is Part 2 of a 3-part blog.  Each part addresses the fundamental requirements and techniques for application related to the standard, and provides specific examples. Part 1 addressed the basic requirements/techniques for allocating home office expenses to segments. This Part 2 addresses the requirements/techniques for allocating home office residual expenses to segments. Part 3 will address special allocations of home office expenses to segments.   Background: To provide criteria for allocating home office expenses to the segments of an organization based on the beneficial or causal relationships between the expenses and the receiving segments (CAS 403-20(a)). What it covers: The allocation of home office expenses to segments of the organization (CAS 403-20(a)). What it does not cover: The accounting treatment of the home office expenses after … Continue reading

CAS 403 – Allocation of Home Office Expenses to Segments (Part 1 of 3)

*This is Part 1 of a 3-part blog.  Each part addresses the fundamental requirements and techniques for application related to the standard, and provides specific examples. This Part 1 addresses the basic requirements/techniques for allocating home office expenses to segments. Part 2 will address the requirements/techniques for allocating home office residual expenses to segments. Part 3 will address special allocations of home office expenses to segments. Background: To provide criteria for allocating home office expenses to the segments of an organization based on the beneficial or causal relationships between the expenses and the receiving segments (CAS 403-20(a)). What it covers: The allocation of home office expenses to segments of the organization (CAS 403-20(a)). What it does not cover: The accounting treatment of the home office expenses … Continue reading

CAS 420 – Accounting for Independent Research & Development (IR&D) Costs and Bid & Proposal (B&P) Costs (Part 3 of 3)

*This is Part 3 of a 3-part blog.  Each part addresses the fundamental requirements and techniques for application related to the standard, and provides specific examples. Part 1 addressed the overall purpose of the standard, as well as the requirements/techniques for the accumulation of IR&D and B&P costs. Part 2 addressed the allocation of IR&D and B&P costs, except for special allocations. This Part 3 addresses special allocations of IR&D and B&P costs.   Background: As stated at CAS 420-20, the purpose of the standard is to provide criteria for the accumulation of IR&D and B&P costs, and for the allocation of such costs to cost objectives based on the beneficial or causal relationship between such costs and cost objectives.     Special Allocations of IR&D and … Continue reading

CAS 420 – Accounting for Independent Research & Development (IR&D) Costs and Bid & Proposal (B&P) Costs (Part 2 of 3)

*This is Part 2 of a 3-part blog.  Each part addresses the fundamental requirements and techniques for application related to the standard, and provides specific examples. Part 1 addressed the overall purpose of the standard, as well as the requirements/techniques for the accumulation of IR&D and B&P costs. This Part 2 addresses the allocation of IR&D and B&P costs, except for special allocations. Part 3 will address special allocations of IR&D and B&P costs.   Background: As stated at CAS 420-20, the purpose of the standard is to provide criteria for the accumulation of IR&D and B&P costs, and for the allocation of such costs to cost objectives based on the beneficial or causal relationship between such costs and cost objectives.   Allocation of IR&D and B&P … Continue reading

CAS 420 – Accounting for Independent Research & Development (IR&D) Costs and Bid & Proposal (B&P) Costs (Part 1 of 3)

*This is Part 1 of a 3-part blog.  Each part addresses the fundamental requirements and techniques for application related to the standard, and provides specific examples. This Part 1 addresses the overall purpose of the standard, as well as the requirements/techniques for the accumulation of IR&D and B&P costs. Part 2 will address the allocation of IR&D and B&P costs, except for special allocations. Part 3 will address special allocations of IR&D and B&P costs.   Background: As stated at CAS 420-20, the purpose of the standard is to provide criteria for the accumulation of IR&D and B&P costs, and for the allocation of such costs to cost objectives based on the beneficial or causal relationship between such costs and cost objectives   What it covers: The … Continue reading

CAS 410 – Allocation of Business Unit General and Administrative (G&A) Expenses to Final Cost Objectives (Part 3 of 3)

*This is Part 3 of a 3-part blog.  Each part addresses the fundamental requirements and techniques for application related to the standard, and provides specific examples. Part 1 addressed the overall purpose of the standard, as well as the requirements/techniques related to the G&A expense pool. Part 2 addressed the requirements/techniques for application related to the G&A allocation base. This Part 3 addresses special allocations of G&A expenses.  Background: To provide criteria for the allocation of business unit general and administrative (G&A) expenses to business unit final cost objectives.  The standard also provides criteria for allocating home office expenses received by the business unit segment to business unit final cost objectives (CAS 410-20).   G&A Special Allocations   CAS 410-40(b)(2) states that the allocation of the … Continue reading

CAS 410 – Allocation of Business Unit General and Administrative (G&A) Expenses to Final Cost Objectives (Part 2 of 3)

*This is Part 2 of a 3-part blog.  Each part addresses the fundamental requirements and techniques for application related to the standard, and provides specific examples. Part 1 addressed the overall purpose of the standard, as well as the requirements/techniques related to the G&A expense pool. This Part 2 addresses the requirements/techniques for application related to the G&A allocation base. Part 3 will address special allocations of G&A expenses. Background:  To provide criteria for the allocation of business unit general and administrative (G&A) expenses to business unit final cost objectives.  The standard also provides criteria for allocating home office expenses received by the business unit segment to business unit final cost objectives (CAS 410-20). G&A Allocation Base A business unit may perform G&A activities for … Continue reading

CAS 410 – Allocation of Business Unit General and Administrative (G&A) Expenses to Final Cost Objectives (Part 1 of 3)

*This is Part 1 of a 3-part blog.  Each part addresses the fundamental requirements and techniques for application related to the standard, and provides specific examples. This Part 1 addresses the overall purpose of the standard, as well as the requirements/techniques related to the G&A expense pool. Part 2 will address the requirements/techniques for application related to the G&A allocation base. Part 3 will address special allocations of G&A expenses. Background:  To provide criteria for the allocation of business unit general and administrative (G&A) expenses to business unit final cost objectives.  The standard also provides criteria for allocating home office expenses received by the business unit segment to business unit final cost objectives (CAS 410-20). What it covers: The allocation of business unit G&A costs … Continue reading

CAS 418 – Allocation of Direct and Indirect Costs (Part 6 of 6)

*This is Part 6 of a 6-part blog.  Each part addresses the fundamental requirements and techniques for application related to the standard, and provides specific examples. Part 1 addressed the overall purpose of the standard, as well as the requirements/techniques for application related to direct costs. This Part 2 addressed the requirements/techniques for application related to indirect cost pools. Part 3 addressed the requirements/techniques for application related to allocation bases (with the exception of the allocation of indirect cost pools that benefit each other, which is addressed in Part 4 of this blog). Part 4 addressed the requirements/techniques for application related to allocation bases for the allocation of indirect cost pools that benefit each other. Part 5 addressed special allocations. This Part 6 addresses pre-determined … Continue reading