The notice of adequacy shall state that- A The disclosed practices are adequately described and the CFAO currently is not aware of any additional practices that should be disclosed; B The notice is not a determination that all cost accounting practices were disclosed; and C The contractor shall not consider a disclosed practice, by virtue of such disclosure, an approved practice for estimating proposals or accumulating and reporting contract and subcontract cost data; or ii If the Disclosure Statement is inadequate, notify the contractor of the inadequacies and request a revised Disclosure Statement.
The rules for determining whether full or modified coverage applies are in 48 CFR Such adjustment shall provide for recovery of the increased costs to the United States, together with interest thereon computed at the annual rate established under section a 2 of the Internal Revenue Code of 26 U.
Subpart The practices disclosed for this contract shall be the same as the practices currently disclosed and applied on all other contracts and subcontracts being performed by the Contractor and which contain a Cost Accounting Standards CAS clause. A CAS-covered contract may be subject to either full or modified coverage.
As an example, under CASif Company A's "residual expenses" defined as those expenses incurred by the home office — usually the corporate office — which cannot be identified to a specific contract, group of contracts, or company segment exceed a specified percentage of revenue, Company A must follow a dictated "three-factor" formula to allocate such expenses, but if Company B's residual expenses do not exceed the percentage even if, in dollar terms, they are greaterCompany B may follow the formula but is not required to do so.
In addition to complying with all 19 standards where applicablethe company must also file a CAS Disclosure Statement, which spells out the company's accounting practices such as if certain costs are treated as direct contract charges or as part of overhead expense.