Cost Accounting Standards (CAS) Series: Implications When Acquiring Companies

In the third episode of Cherry Bekaert’s Cost Accounting Standards (CAS) podcast series, Brendan Halloran, a Director with Cherry Bekaert Advisory, is joined by Jeffery Annessa, a Senior Manager in Cherry Bekaert’s Government Contractor Industry practice, to discuss CAS implications during mergers and acquisitions.

Cherry Bekaert’s government contracting consulting team has years of CAS experience and can help you navigate CAS compliance issues or disclosure statement development.

This episode highlights key topics to help guide your business forward, including:

• Scenarios and implications to CAS when:
  • A CAS-covered company acquires a company that is non-CAS covered
  • A non-CAS covered company acquires a company with CAS coverage
• The two most common approaches on how to treat the company you are acquiring, specifically:
  • A legal entity dissolved and integrated fully
  • A legal entity being maintained as a wholly owned subsidiary
• Understanding CAS structure as it relates to the company
• Steps to consider when merging with or acquiring a company
• Common areas that do not constitute a cost accounting practice change
• Impacts and considerations when the acquired company is CAS covered
• Areas a CAS-covered company should focus their attention on when acquiring, including:
  • Transitional accounting period
  • Indirect rate structure
  • Similarity of labor
  • Allocations
  • Restructuring cost
  • Pitfalls to avoid
• Areas a non-CAS covered company should focus their attention on when acquiring, such as:
  • Analysis of the CAS-covered contracts to understand period of performance, numbers and money magnitude
  • Additional exposure
  • Compliance requirements

If you haven’t already, catch up on part one and two of the series:

• Cost Accounting Systems Series: Part 1 – An Overview
• Cost Accounting Systems Series: Part 2 – Growing a GovCon

Related Insights

• Webinar Recording: Cost Accounting Standards (CAS): Part 1 – CAS Coverage Types, Common Standards, and CAS Applicability
• Webinar Recording: Cost Accounting Standards (CAS): Part 2 – Cost Accounting Changes and Impact