Frequently Asked Questions
Indirect Rate Models
How do I know what Indirect Rate Model to use?
The ICAT Help file provides numerous examples of Indirect Rate Models from which you can choose. For more complicated Indirect Rate Models, you should consider attending FCSN training or contact one of the affiliated accounting service providers.
What is a Cost Pool ?
Cost Pools are groupings of costs in the accounting system which can be:
1) charged directly to contracts (direct costs), 2) allocated amongst contracts using an allocation base (indirect costs),
or 3) excluded from being charged to contracts entirely (unallowable costs). ICAT will recognize all
"Cost of Goods Sold" and "Expense" type accounts situated at the top level of the Chart-of-Accounts
hierarchy to be Cost Pool headings. All transaction accounts which are sub-accounts of such top-level
cost pool headers make up the content of the cost pools.
What is a an Allocation Center?
Allocation Centers are similar to cost pools, but serve a slightly different purpose.
Allocation centers are used to accumulate costs which are common to more than one cost pool, and are
allocated among cost pools using some user defined allocation base, which may be a base other than cost.
The most common example of an Allocation Center would be Facility Costs, which can be allocated to the
Overhead and G&A cost pools using a base of square footage, head count, FTE's or some other user-defined
allocation base. This enables the contractor to simplify the charging of costs which are common to various
cost pools so that the user can simply charge such costs to the allocation center rather than having to split
each charge upon recording the transaction.