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Q: In regard to Transfer Pricing, what are some indicators of potential exposures?
Exposures would be:
a. buying or selling goods without a logical or written explanation for pricing
b. providing a service to overseas operations without charge
c. paying a lump sum to cover several different services
d. providing loans to foreign counterparts wtihout charging interest
e. having sudden changes in your gross margins due to changes in pricing
f. if you are showing low margins for your market
Q: How is cost-sharing and matching used?
If cost sharing is required, whenever possible it should, take the form of investigator and/or other project staff effort contributions, including personnel salary and fringe benefits, as well as the associated institutional F&A costs. In general, staff is encouraged to refrain from budgeting non-personnel-related cost sharing whenever possible, unless it can be easily documented in the accounting system. Cost sharing is expensive to document and adversely affects the F&A rate; therefore, it should be kept to a minimum.
2 CFR part 200 defines cost sharing or matching as the portion of a project cost not paid by federal funds (unless otherwise authorized by Federal statute). Although the two terms are often used interchangeably, the term matching is actually a specific type of cost sharing, typically used when a sponsor requires the grantee to "match" the sponsor funding according to a specified ratio.
Some sponsors require universities to reflect their commitment to a project by sharing in its costs. Most sponsors, however, do not require cost sharing, and some don't even allow it. It is not necessary or desirable to engage in cost-sharing, except when:
i. Mandated by the sponsor; or
ii. Needed to accurately reflect the level
of effort required for the project.
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2016 Q2 ISSUE COSTTREE CAPTURE. 35
Thank you to everyone who submitted a question to CAPTURE by CostTree. All questions submitted and not shown below will be answered via email.
Enterprise Fund: used to report any activity for which a fee is charged to external users for goods or services.
Intangible Costs: consist of the amortization of hard to value items that are not tangible by nature, meaning they cannot be seen or touched.