[Code of Federal Regulations]

[Title 48, Volume 7]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR9903.305]



[Page 350-351]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

     CHAPTER 99--COST ACCOUNTING STANDARDS BOARD, OFFICE OF FEDERAL 

           PROCUREMENT POLICY, OFFICE OF MANAGEMENT AND BUDGET

 

PART 9903_CONTRACT COVERAGE--Table of Contents

 

                Subpart 9903.3_CAS Rules and Regulations

 

Sec. 9903.305  Materiality.



    In determining whether amounts of cost are material or immaterial, 

the following criteria shall be considered where appropriate; no one 

criterion is necessarily determinative:

    (a) The absolute dollar amount involved. The larger the dollar 

amount, the more likely that it will be material.

    (b) The amount of contract cost compared with the amount under 

consideration. The larger the proportion of the amount under 

consideration to contract cost, the more likely it is to be material.



[[Page 351]]



    (c) The relationship between a cost item and a cost objective. 

Direct cost items, especially if the amounts are themselves part of a 

base for allocation of indirect costs, will normally have more impact 

than the same amount of indirect costs.

    (d) The impact on Government funding. Changes in accounting 

treatment will have more impact if they influence the distribution of 

costs between Government and non-Government cost objectives than if all 

cost objectives have Government financial support.

    (e) The cumulative impact of individually immaterial items. It is 

appropriate to consider whether such impacts:

    (1) Tend to offset one another, or

    (2) Tend to be in the same direction and hence to accumulate into a 

material amount.

    (f) The cost of administrative processing of the price adjustment 

modification shall be considered. If the cost to process exceeds the 

amount to be recovered, it is less likely the amount will be material.