Interim rates are claimed indirect pool rates negotiated with the government, but are not yet audited by the Defense Contract Audit Agency (DCAA).

These rates are not yet final and are given to government contractors for billing and revenue recognition.

Final rates on the other hand are audited final rates that have been approved for a fiscal year or contract. They may change from what the interim rates were and may result in revenue changes for a prior year. After the final rates are determined, the government contractor has to recalculate revenue which may increase or decrease.

Costpoint has built-in utilities that can make the revenue recognition for interim and final rates easier such as:

• Record audit adjustments in books of a prior year
• See the effect of audited rates on financial statements and project profitability for a prior year, without restating financials and project reports for that year.
• Calculate prior year indirect rates, indirect project costs, and project revenue without affecting prior financials and project reports
• Calculate revenue for a prior year based on data in effect during that year (regardless of changes to project owning org, ceilings, etc., since that year)
• Store final rates by cost pool without overwriting historical fiscal year rates
• Recognize revenue changes for a prior year in the current year, and bill final amounts to the customer based on final rates calculated
• Easily produce reports showing the difference between year-end and claimed/final rates for financial statements, project reports, and indirect pools

To know more about the step-by-step process in handling interim and final rates, see Interim and Final Rates Process.