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Simplified method
Simplified method
The simplified method is a way of declaring indirect costs which applies to organisations which do not aggregate their indirect costs at a detailed level (centre, department), but can aggregate their indirect costs at the level of the legal entity. It is a system that can be used if the organisation does not have an accounting system with a detailed cost allocation.
When a Certificate on the Financial Statement is submitted a cameralistic accountancy must be legally stipulated. There is no standard model, in fact the indirect costs will be broken down from the total-level to the single research projects according to individual developed key, i.e.
The simplified method shall be based on the real costs of the prior financial year. For this reason the indirect cost rate can vary each year.
In Germany the simplified method is seldom used. In other European Member States this method enjoys great popularity, foreseen as the first step to full cost accounting.
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