Determining Allowability
Allowable or Unallowable:
Source: Federal Acquisition Regulation (FAR)
Allowable if:
- Reasonable,
- Allocable,
- In accordance with Generally Accepted Accounting Principles (GAAP) and/or Cost Accounting Standards (CAS)appropriate with the circumstances,
- In accordance with the terms of the contract, and
- Within limitations of FAR 31.2
Cost Principles and Cost Accounting Standards (CAS)
Some Cost Principles incorporate rules or reference certain CAS
- Allowability limited to the amounts determined under CAS
Determination, Categorization and Documentation - What a contractor needs to do:
- Determine the cost appropriately,
- Categorize the cost appropriately,
- Have documentation available to demonstrate that the cost are determined allowable and categorized appropriately
- Maintain records and supporting documentation, to demonstrate the cost have been paid, and are allowable and comply with the applicable cost principles.[1]
References and Notes
- ↑ FAR 31.201-2