[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR31.201-2]

[Page 584-585]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
              (This book contains chapter 1, parts 1 to 51)

                CHAPTER 1--FEDERAL ACQUISITION REGULATION
  --------------------------------------------------------------------
 
PART 31_CONTRACT COST PRINCIPLES AND PROCEDURES--Table of Contents
 
          Subpart 31.2_Contracts With Commercial Organizations
 
Sec. 31.201-2  Determining allowability.

    (a) A cost is allowable only when the cost complies with all of the 
following requirements:
    (1) Reasonableness.
    (2) Allocability.
    (3) Standards promulgated by the CAS Board, if applicable, 
otherwise, generally accepted accounting principles and practices 
appropriate to the circumstances.
    (4) Terms of the contract.
    (5) Any limitations set forth in this subpart.
    (b) Certain cost principles in this subpart incorporate the 
measurement, assignment, and allocability rules of selected CAS and 
limit the allowability of costs to the amounts determined using the 
criteria in those selected standards. Only those CAS or portions of 
standards specifically made applicable by the cost principles in this 
subpart are mandatory unless the contract is CAS-covered (see 48 CFR 
9903). Business units that are not otherwise subject to these standards 
under a CAS clause are subject to the selected standards only for the 
purpose of determining allowability of costs on Government contracts. 
Including the selected

[[Page 585]]

standards in the cost principles does not subject the business unit to 
any other CAS rules and regulations. The applicability of the CAS rules 
and regulations is determined by the CAS clause, if any, in the contract 
and the requirements of the standards themselves.
    (c) When contractor accounting practices are inconsistent with this 
subpart 31.2, costs resulting from such inconsistent practices in excess 
of the amount that would have resulted from using practices consistent 
with this subpart are unallowable.
    (d) A contractor is responsible for accounting for costs 
appropriately and for maintaining records, including supporting 
documentation, adequate to demonstrate that costs claimed have been 
incurred, are allocable to the contract, and comply with applicable cost 
principles in this subpart and agency supplements. The contracting 
officer may disallow all or part of a claimed cost that is inadequately 
supported.

[48 FR 42301, Sept. 19, 1983, as amended at 57 FR 39590, Aug. 31, 1992; 
61 FR 31656, June 20, 1996; 69 FR 17767, Apr. 5, 2004]