Difference between revisions of "CAS 405 - Accounting for Unallowable Costs"
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| + | ==9904.405-20 Purpose== | ||
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| + | '''(a)''' The purpose of this Cost Accounting Standard is to facilitate the negotiation, audit, administration and settlement of contracts by establishing guidelines covering: | ||
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| + | '''(1)''' '''Identification of costs''' specifically described as unallowable, at the time such costs first become defined or authoritatively designated as unallowable, '''and''' | ||
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| + | '''(2)''' The '''cost accounting treatment to be accorded such identified unallowable costs''' in order to promote the consistent application of sound cost accounting principles covering all incurred costs. | ||
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| + | The Standard is predicated on the proposition that costs incurred in carrying on the activities of an enterprise—regardless of the allowability of such costs under Government contracts—are allocable to the cost objectives with which they are identified on the basis of their beneficial or causal relationships. | ||
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| + | '''(b)''' '''This Standard does''' '''''NOT'''' '''govern the allowability of costs.''' This is a function of the appropriate procurement or reviewing authority. | ||
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Revision as of 13:32, 25 August 2014
9904.405-20 Purpose
(a) The purpose of this Cost Accounting Standard is to facilitate the negotiation, audit, administration and settlement of contracts by establishing guidelines covering:
(1) Identification of costs specifically described as unallowable, at the time such costs first become defined or authoritatively designated as unallowable, and
(2) The cost accounting treatment to be accorded such identified unallowable costs in order to promote the consistent application of sound cost accounting principles covering all incurred costs.
The Standard is predicated on the proposition that costs incurred in carrying on the activities of an enterprise—regardless of the allowability of such costs under Government contracts—are allocable to the cost objectives with which they are identified on the basis of their beneficial or causal relationships.
(b) This Standard does NOT' govern the allowability of costs. This is a function of the appropriate procurement or reviewing authority.
Requirements
- Costs expressly unallowable, or mutually agreed to be unallowable, shall be identified and excluded from any billing, claim, or proposal to the Government.
- Costs which become designated as unallowable as a result of a CO’s written decision pursuant to disputes procedures shall be identified if included or used in the computation of any billing, claim, or proposal.
- Costs directly associated with unallowable costs that would not have been incurred if not for the incurrence of the unallowable costs are also unallowable.
- Costs of any project not contractually authorized shall be accounted for in a manner which allows ready separation from costs of authorized projects.
- Where unallowable costs are normally part of a base(s) for the allocation of indirect expenses, the unallowable costs shall remain a part of the base(s).
Applicability
- Applies under modified and full coverage. 48 CFR 9904.405
