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Q: FP7 - SMEs: we have gathered 4 small and micro companies, which must chose a 'cost model'. 1) Is this cost model chosen by CEC for small companies? 2) Do they have to chose a cost model themselves? 3) Do they have to chose a cost model at stage 1 of the proposal ?
A: One of the differences between FP7 and FP6 is that under FP7 the cost reporting models are not the same as in FP6. In Stage-2 participants have to choose an appropriate method for calculating their indirect costs (overheads) and stick to that method throughout FP7. Please see annex 3 of the guide for applicants from which we quote below: indirect costs shall represent a fair apportionment of the overall overheads of the organisation. They may be identified according to one of the following methods: Real indirect costs: A participant may use a simplified method of calculation of its full indirect eligible cost at the level of its legal entity if it is in accordance with its usual accounting and management principles and practices. Use of such a method is only acceptable where the lack of analytical accounting or the legal requirement to use a form of cash-based accounting prevents detailed cost allocation. The simplified approach must be based on actual costs derived from the financial accounts of the period in question. A participant may opt for a flat-rate of 20% of its total direct eligible costs, excluding its direct eligible costs for subcontracting and the costs of reimbursement of resources made available by third parties which are not used on the premises of the participant. Non-profit public bodies, secondary and higher education establishments, and research organisations and SMEs, which are unable to identify with certainty their real indirect costs for the project, when participating in funding schemes which include research and technological development and demonstration activities may optfor a flat-rate of 60% of the total direct eligible costs1 excluding costs for subcontracting and the costs of reimbursement of resources made available by third parties which are not used on the premises of the participant. If these participants change their status during the life of the project, this flat rate shall be applicable up to the moment they lose their status. The participant shall apply the method chosen in all grant agreements under the Seventh Framework Programme.
Category : FP7 (Seventh Framework Programme) ( NMP )