1. Home
  2. |Insights
  3. |PRB Costs Allowable Whether Measured Under FAS 106 or IRS Criteria

PRB Costs Allowable Whether Measured Under FAS 106 or IRS Criteria

Client Alert | 1 min read | 09.23.09

To address the "catch-22" confronted by contractors using the accrual method of calculating post-retirement benefit (PRB) costs for financial reporting purposes who have had to choose either to fund the entire amount of PRB costs measured in accordance with Financial Accounting Standard (FAS) 106 in order to be reimbursed for the costs on Government contracts, or to fund only the amount of PRB costs deductible under the Internal Revenue Code (IRC) and thereby forgo reimbursement of the full FAS 106 amount, the FAR has been amended, under a final rule effective January 11, 2010, to allow contractors the option to measure accrued post-retirement benefit (PRB) costs using either the criteria in FAS 106 or the criteria in IRC 419. The final rule also (1) addresses the transition period when a change is made from one accrual accounting method to another by requiring the contractor to treat the change in unfunded accumulated PRB obligation as a gain or loss and demonstrate that there will be no duplicate recovery of costs as a result of the change; (2) expressly states that any prior period unfunded accrual is unallowable under either method of accrual accounting; and (3) clarifies that use of a health care assumption for measurement of costs is required unless prohibited by IRC welfare benefit fund rules.

Insights

Client Alert | 5 min read | 12.12.25

Eleventh Circuit Hears Argument on False Claims Act Qui Tam Constitutionality

On the morning of December 12, 2025, the Eleventh Circuit heard argument in United States ex rel. Zafirov v. Florida Medical Associates, LLC, et al., No. 24-13581 (11th Cir. 2025). This case concerns the constitutionality of the False Claims Act (FCA) qui tam provisions and a groundbreaking September 2024 opinion in which the United States District Court for the Middle District of Florida held that the FCA’s qui tam provisions were unconstitutional under Article II. See United States ex rel. Zafirov v. Fla. Med. Assocs., LLC, 751 F. Supp. 3d 1293 (M.D. Fla. 2024). That decision, penned by District Judge Kathryn Kimball Mizelle, was the first success story for a legal theory that has been gaining steam ever since Justices Thomas, Barrett, and Kavanaugh indicated they would be willing to consider arguments about the constitutionality of the qui tam provisions in U.S. ex rel. Polansky v. Exec. Health Res., 599 U.S. 419 (2023). In her opinion, Judge Mizelle held (1) qui tam relators are officers of the U.S. who must be appointed under the Appointments Clause; and (2) historical practice treating qui tam and similar relators as less than “officers” for constitutional purposes was not enough to save the qui tam provisions from the fundamental Article II infirmity the court identified. That ruling was appealed and, after full briefing, including by the government and a bevy of amici, the litigants stepped up to the plate this morning for oral argument....

View All Insights