9904.415 48 CFR Ch. 99 (10–1–10 Edition)

TABLE XVII—SUMMARY OF OF MONEY COMPUTATION ON FACILITIES CAPITAL—Continued [Cost of money included in total cost input—regular method]

Computation using regular Allocated to facilities, cap- Allocation base contract, ital cost of Amount table VIII money factor, table XV

Manufacturing labor ...... 1,210,000 .18 217,800 Technical computer time ...... 1 280 15.57895 4,362 Cost of money related to overheads ...... 236,365 Cost of money above to be included in cost input ...... 236,365 ...... Cost input, table VIII ...... 5,369,000 ......

Cost input including cost of money ...... 5,605,365 .00096 5,381 Total cost of money on facilities capital ...... 241,674 1 Hours.

TABLE XVIII—SUMMARY OF COST OF MONEY COMPUTATION ON FACILITIES CAPITAL [Cost of money included in total cost input—alternative method]

Computation using alter- Allocated to native facili- Allocation base contract, ties, capital Amount table VIII cost of money factor, table XVI

Engineering labor ...... $330,000 0.0128 $4,224 Manufacturing labor ...... 1,210,000 .12 145,200 Cost of money related to overheads ...... 149,424 Cost of money above to be included in cost input ...... 149,424 ...... Cost input, table VIII ...... 5,369,000 ......

Cost input including cost of money ...... 5,518,424 .00841 46,410 Total cost of money on facilities capital ...... 5,518,424 ...... 195,834

[57 FR 14153, Apr. 17, 1992; 57 FR 34081, 34167, Aug. 3, 1992]

9904.415 for the cost of de- (2) The cost for pension plans that do ferred compensation. not meet the definition of an Employee Stock Ownership Plan (ESOP). 9904.415–10 [Reserved] [73 FR 23964, May 1, 2008] 9904.415–20 Purpose. 9904.415–30 Definitions. (a) The purpose of this Standard (a) The following are definitions of 9904.415 is to provide criteria for the terms which are prominent in this measurement of the cost of deferred Standard 9904.415. Other terms defined compensation and the assignment of elsewhere in this Chapter 99 shall have such cost to cost accounting periods. the meanings ascribed to them in those The application of these criteria should definitions unless paragraph (b) of this increase the probability that the cost section requires otherwise. of deferred compensation is allocated (1) Deferred compensation means an to cost objectives in a uniform and con- award made by an employer to com- sistent manner. pensate an employee in a future cost (b) This Standard is applicable to the or periods for serv- cost of all deferred compensation ex- ices rendered in one or more cost ac- cept the following which are covered in counting periods prior to the date of other Cost Accounting Standards: the receipt of compensation by the em- (1) The cost for compensated personal ployee. This definition shall not in- absence, and clude the amount of year end for salaries, wages, or bonuses that are to be paid within a reasonable period of

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time after the end of a cost accounting rately for purposes of measurement period. and assignment of such to cost (2) Employee Stock Ownership Plan accounting periods. However, if the (ESOP) means: cost of deferred compensation for the (i) An employee benefit plan that is employees covered by a deferred com- described by the Employee Retirement pensation plan can be measured and as- Income Security Act of 1974 (ERISA) signed with reasonable accuracy on a and the Internal Code (IRC) of group basis, separate computations for 1986 as a stock bonus plan, or combina- each employee are not required. tion stock bonus and money purchase [73 FR 23965, May 1, 2008] pension plan, designed to invest pri- marily in employer stock, and 9904.415–50 Techniques for applica- (ii) Any other deferred compensation tion. plan designed to invest primarily in (a) The contractor shall be deemed to the stock of the contractor’s corpora- have incurred an obligation for the tion including, but not limited to, cost of deferred compensation when all plans covered by ERISA. of the following conditions have been (3) means the amount that met. However, for awards which re- a seller would reasonably expect to re- quire that the employee perform future ceive in a current arm’s length trans- service in order to receive the benefits, action between a willing buyer and a the obligation is deemed to have been willing seller, other than a forced or incurred as the future service is per- liquidation sale. formed for that part of the award at- (b) The following modifications of tributable to such future service: terms defined elsewhere in this Chapter (1) There is a requirement to make 99 are applicable to this Standard: the future payment(s) which the con- (1) Market value means the current tractor cannot unilaterally avoid. or prevailing price of a stock or other (2) The deferred compensation award property as indicated by market is to be satisfied by a future payment quotations. of money, other , or shares of (2) [Reserved] stock of the contractor. [57 FR 14153, Apr. 17, 1992, as amended at 73 (3) The amount of the future pay- FR 23964, May 1, 2008] ment can be measured with reasonable accuracy. 9904.415–40 Fundamental require- (4) The recipient of the award is ment. known. (a) The cost of deferred compensation (5) If the terms of the award require shall be assigned to the cost - that certain events must occur before ing period in which the contractor in- an employee is entitled to receive the curs an obligation to compensate the benefits, there is a reasonable prob- employee. In the event no obligation is ability that such events will occur. incurred prior to payment, the cost of (6) For stock options, there must be a deferred compensation shall be the reasonable probability that the options amount paid and shall be assigned to ultimately will be exercised. the cost accounting period in which the (b) If any of the conditions in payment is made. 9904.415–50(a) is not met, the cost of de- (b) Measurement of deferred com- ferred compensation shall be assign- pensation costs. able only to the cost accounting period (1) For deferred compensation other or periods in which the compensation than ESOPs, the deferred compensa- is paid to the employee. tion cost shall be the present value of (c) If the cost of deferred compensa- the future benefits to be paid by the tion can be estimated with reasonable contractor. accuracy on a group basis, including (2) For an ESOP, the deferred com- consideration of probable forfeitures, pensation cost shall be the amount such estimate may be used as the basis contributed to the ESOP by the con- for measuring and assigning the tractor. present value of future benefits. (c) The cost of each award of deferred (d) The following provisions are ap- compensation shall be considered sepa- plicable for plans, other than ESOPs,

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