[Code of Federal Regulations]

[Title 48, Volume 7]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR9903.302-1]



[Page 347-348]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

     CHAPTER 99--COST ACCOUNTING STANDARDS BOARD, OFFICE OF FEDERAL 

           PROCUREMENT POLICY, OFFICE OF MANAGEMENT AND BUDGET

 

PART 9903_CONTRACT COVERAGE--Table of Contents

 

                Subpart 9903.3_CAS Rules and Regulations

 

Sec. 9903.302-1  Cost accounting practice.



    Cost accounting practice, as used in this part, means any disclosed 

or established accounting method or technique which is used for 

allocation of cost to cost objectives, assignment of cost to cost 

accounting periods, or measurement of cost.

    (a) Measurement of cost, as used in this part, encompasses 

accounting methods and techniques used in defining the components of 

cost, determining the basis for cost measurement, and establishing 

criteria for use of alternative cost measurement techniques. The 

determination of the amount paid or a change in the amount paid for a 

unit of goods and services is not a cost accounting practice. Examples 

of cost accounting practices which involve measurement of costs are--

    (1) The use of either historical cost, market value, or present 

value;

    (2) The use of standard cost or actual cost; or

    (3) The designation of those items of cost which must be included or 

excluded from tangible capital assets or pension cost.

    (b) Assignment of cost to cost accounting periods, as used in this 

part, refers



[[Page 348]]



to a method or technique used in determining the amount of cost to be 

assigned to individual cost accounting periods. Examples of cost 

accounting practices which involve the assignment of cost to cost 

accounting periods are requirements for the use of specified accrual 

basis accounting or cash basis accounting for a cost element.

    (c) Allocation of cost to cost objectives, as used in this part, 

includes both direct and indirect allocation of cost. Examples of cost 

accounting practices involving allocation of cost to cost objectives are 

the accounting methods or techniques used to accumulate cost, to 

determine whether a cost is to be directly or indirectly allocated to 

determine the composition of cost pools, and to determine the selection 

and composition of the appropriate allocation base.