Contrast of Obsolete Disclosure Statement to Observed Practices
A Careful Reading of the Cost Accounting Standards (CAS) Current Disclosure Statement, if any, allows notes for revision. Edits are usually more efficient than recreation. Notes for revisions reflect differences between disclosed and observed ways of accounting for specific types of costs.
Draft of New Disclosure Statement
A New Disclosure Statement emerges, based on the background understanding. Each component of the prescribed Statement is addressed, including “Not Applicable” topics. The Statement reflects how costs are estimated in proposals, historical accounting records, and customer invoices (including percentage of costs to complete required for status reports). The method for estimating, recording, and invoicing particular costs is consistently applied. The recommended Statement accurately reflects actual practices and discloses this consistency.
“Submit a new or revised Disclosure Statement
that reflects actual practices and complies with CAS.”
Calculation of Cost of Money
If the organization may use this “interest income substitute” in proposals and invoices. Accurate accounting data regarding the value of facilities, equipment, and other investments is provided by and the responsibility of the client. All forms related to the Disclosure Statement can be completed in draft format, for management revision/approval.
Compliant Procedures versus Observed Practices
Review by Accounting Management ensures accuracy plus implementation of practical changes for consistency. Discussion with management explores needed documentation, such as (revised) formal policies and procedures to support the Statement. The post-draft meeting highlights any further revisions to better mirror actual practices, including practices realigned to match management intent.