Before specifically answering the enquiry, we point out that, in our opinion, the use of “third party” in the financial guidelines as quoted here confuses the issue. We believe that the intention in this specific quote it is meant to indicate parties not involved in the project and , not “third parties” as used in the definition for those working with contractors and that are part of the project. The issue is receipts not eligible costs. The following tries to help explain the thinking: 1. Financial transfers or their equivalent to the contractor from third parties: An organisation or person (not a partner in the project, a contractor or a third party, within the “other “ third party definition) makes a “cash” donation or finances the cost of the project directly. Direct costs 2,500 Overheads at 20% (or FF rate if applicable) 500 Costs claimed 3,000 Gross Funding – AC model 100% 3,000 Receipt (recorded in form C) 1,600 Net funding from EU 1,400 Gross Funding – FF/FCF model 50% 1,500 Receipt (recorded in form C) 1,600 Net funding from EU 1,400 * = 1,500-(1,500+1,600-3,000) Note: Receipts plus net funding must not exceed total costs claimed (and but also must not exceed gross funding) – see below for example where receipts plus net funding do not exceed eligible costs including overheads for FF or FCF cost models. 2. Contributions in kind from third parties: An organisation or person (not a partner in the project, a contractor or as a third party) provides free services or consumables or durable equipment (e.g. use of equipment, purchase of equipment specifically for the project, free air travel or Hotel accommodation, materials etc). These need to be valued and expressed as a direct cost with overheads added according to cots model used. The amount shown as direct cost for the service, consumables etc is also shown as a receipt. The effect can be illustrated as follows: Value of consumables etc. provided free 1,000 Other direct costs 3,000 Total direct costs 4,000 Overheads at 20% (or FF rate if applicable) 800 Costs claimed 4,800 Gross Funding – AC model 100% 4,800 Receipt (recorded in form C) 1,000 Net funding from EU 3,800 Gross Funding – FF/FCF model 50% 2,400 Receipt (recorded in form C) 1,000 Net funding from EU 2,400 * = 2,400-(2,400+1,000-4,800), but not to exceed gross funding Note again, Receipts plus net funding must not exceed total costs claimed but also must not exceed gross funding. 3. Income generated by the project: Income generated in project (e.g. interest of coordinator on bank account before distribution to partners, charges for participation in training courses, sale of equipment purchased by project etc.) Direct costs 3,000 Overheads at 20% (or FF rate if applicable) 600 Costs claimed 3,600 Gross Funding – AC model 100% 3,600 Receipt (recorded in form C) 200 Net funding from EU 3,400 Gross Funding – FF/FCF model 50% 1,800 Receipt (recorded in form C) 200 Net funding from EU 1,800 * = 1,800-(1,800+200-3,600), but not to exceed gross funding Note again, Receipts plus net funding must not exceed total costs claimed but also must not exceed gross funding. NOTE: The answer above relates to FP6 and will be different in FP7 | 
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