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New Customs Publication Demands Independent Satisfaction of Customs Value Requirements

Client Alert | 1 min read | 05.31.07

Several weeks ago, U.S. Customs issued another in its series of Informed Compliance Publications for importers, this one concerning transfer pricing. We have included a link below.

There has always existed a tension between international transfer pricing principles under the customs laws (which seek to maximize import value) and under the income tax laws (which seek to minimize cost of goods sold), but for some time there was a tacit recognition by Customs that a tax compliant transfer price would not be challenged by it. The new Customs publication refutes that tacit recognition, and demands independent satisfaction of the customs value requirements. The Customs publication does acknowledge, however, that the same economic and financial analyses which led to a tax compliant transfer price might support a customs compliant transfer price, but that importers would at least have to perform a separate "reasonable care" inquiry under the customs laws and not just assume that the tax-driven transfer price is an acceptable customs value.

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Client Alert | 1 min read | 07.08.26

CAS Board Publishes Final Rule Rescinding CAS 404, 408, 409, and 4117

As part of its ongoing effort to conform the Cost Accounting Standards (“CAS”) to generally accepted accounting principles (“GAAP”), the CAS Board published a final rule rescinding CAS 408 (Accounting for costs of compensated personal absence) and CAS 411 (Accounting for acquisition costs of material).  The CAS Board also rescinded CAS 404 (Capitalization of tangible assets) and CAS 409 (Depreciation of tangible capital assets) but retained certain requirements of CAS 404 and 409, which will be located in new paragraphs of CAS 405 (Accounting for unallowable costs).  Specifically, the CAS Board retained the requirements currently located at CAS 404-50(d)(1), CAS 409-50(e)(5), CAS 409-50(j)(1), and CAS 409-50(j)(4), which the CAS Board explained are necessary to protect the Government’s interests.  Otherwise, the CAS Board determined that the requirements of CAS 404, 408, 409, and 411 overlapped with GAAP such that GAAP “may be applied reasonably as a substitute for CAS to support contract cost and pricing.”...

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