Modification of PSAF for priced services calculations. (Announcements).The Federal Reserve Board announced on October October: see month. 10, 2001, modifications to the method for calculating the private-sector adjustment factor (PSAF PSAF Private Sector Adjustment Factor ). The PSAF imputes the costs that would have been incurred and profits that would have been earned if the Reserve Banks' priced services were provided by a private firm. The revised method will be used to determine the 2002 PSAF and fees for Federal Reserve priced services. The Monetary Control Act of 1980 requires that fees for Federal Reserve priced services be set at a rate to recover all direct and indirect costs Indirect costs are costs that are not directly accountable to a particular function or product; these are fixed costs. Indirect costs include taxes, administration, personnel and security costs. See also
In the legal sense, the term imputed is used to describe an action, fact, or quality, the knowledge of which is charged to an individual based upon the actions of another for whom the individual is responsible rather than on the individual's costs, such as financing costs, return on equity (profit), taxes, and certain other expenses. The method for calculating the PSAF is reviewed by the Board periodically. The Board requested public comment on the changes in December December: see month. 2000. The changes approved by the Board modify the current method for imputing debt and equity, enhance the method for determining the target rate of return on equity, and refine the basis for selecting the priced services peer group. |
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