Pass Through reported as Revenue?

By ordinary definition, the amount paid to the prime contractor is revenue of the prime.

Timbo said:

A Subcontractor submits expenses to Prime contractor for Defense Base Act insurance and airfare with regards to a specific contract.   The prime reimburses the sub and then submits these costs for reimbursement requests to the government.  When the prime is reimbursed from the government are there any scenarios where this reimbursement would be considered revenue to the prime?

To Vern's point, I have a hard time thinking about scenarios where government payment's to the prime would not be considered as prime contractor revenue/sales.

The subK incurs costs and submits an invoice to the prime. The prime pays the invoice, incurring a cost -- presumably recording the cost as an element of cost of sales. The prime submits an invoice to the government for its costs, which now include the subK's costs that it paid. The government pays the prime's invoice, which is treated as revenue/sales.

The difference between the revenue recorded and the cost of sales recorded is the contract's gross margin.

Timbo said:

When the prime is reimbursed from the government are there any scenarios where this reimbursement would be considered revenue to the prime?

The reimbursement of the specific costs mentioned would be considered as revenue.  However, for determining a firm's size when a revenue (receipts)standard is used, see 13, CFR 121.104.

Thanks everyone, this is very helpful information!