BACKDATING AT ESA - CALCULATION OF THE BACKDATED COST-AT-COMPLETION OF OPTIONAL PROGRAMS

Backdating is the conversion of actual expenses and forecasts of expen ses for a programme to a unique economic basis in order to be able to compare expenses incurred during different years under different econo mic conditions (price levels, conversion rates) and define the Cost-at -Completion (CAC) of a programme. The CAC is the total cost for a prog ramme, expressed at certain economic conditions (the same for all the years of life of the programme). It is not the sum of actual expenses and forecasts, as these are expressed at different economic conditions , The ESA Convention (Article III of Annex III; Fig. 1) states that a Member State can withdraw from a programme if the CAC is to go beyond a limit of 120% of the indicative financial envelope. This means that there should be a means of comparing actual expenses with the indicati ve financial envelope, whether it is explicitly requested in the Decla ration for a programme or more generally to monitor the total cost of a programme, Backdating is a means of relating all expenses or forecas ts back to the price and currency rate levels of the Declaration so th at they can be directly compared with the envelope voted.