Monthly Archives: August 2015

SBIR Accounting Myth #12: “Being a Cash-Basis Taxpayer Makes the Most Sense”

Sometimes. If your business has a cost-plus-type contract (CPFF), this may not be a big problem as long as your expenses are paid and your federal voucher payments are received in the same accounting period. Fixed price contracts (FFP) tend … Continue reading

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SBIR Accounting Myth #11: “I Can Depreciate Direct Equipment”

Nope! In most cases, if you were reimbursed by the U.S. Government for direct equipment, you don’t own the property. Therefore, you can’t depreciate what you don’t own. Also, if you’re reimbursed for the total cost of the equipment, you … Continue reading

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SBIR Accounting Myth #10: “I Can Use My Tax Depreciation for My Indirect Rates”

Maybe. If you’re using tax depreciation based on generally accepted accounting principles (GAAP), then you’re okay. However, this is rare, so chances are you’re using the modified accelerated cost recovery system (MACRS) and/or expense election (IRC Section 179) depreciation that … Continue reading

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SBIR Accounting Myth #9: “If My Executive Compensation Exceeds the NIH Limit, I Can Record the Difference Under F & A”

No. The direct portion (hourly effective rate based on level of effort) of time can only be billed up to the NIH Executive Compensation Limit. The indirect portion may be up to the amount actually paid (again, level of effort) … Continue reading

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SBIR Accounting Myth #8: “When My Contract Expires, I Can Run My Excess Costs Through Indirect Rates”

This would be a major problem in your system, not to mention risk with the United States Government. Costs do not change their color because your period of performance ended. A direct cost is a direct cost regardless of the … Continue reading

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