[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: 48CFR9904.403-20]



[Page 359]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

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

           PROCUREMENT POLICY, OFFICE OF MANAGEMENT AND BUDGET

 

PART 9904_COST ACCOUNTING STANDARDS--Table of Contents

 

Sec. 9904.403-20  Purpose.



    (a) The purpose of this Cost Accounting Standard is to establish 

criteria for allocation of the expenses of a home office to the segments 

of the organization based on the beneficial or causal relationship 

between such expenses and the receiving segments. It provides for:

    (1) Identification of expenses for direct allocation to segments to 

the maximum extent practical;

    (2) Accumulation of significant nondirectly allocated expenses into 

logical and relatively homogeneous pools to be allocated on bases 

reflecting the relationship of the expenses to the segments concerned; 

and

    (3) Allocation of any remaining or residual home office expenses to 

all segments.



Appropriate implementation of this Standard will limit the amount of 

home office expenses classified as residual to the expenses of managing 

the organization as a whole.

    (b) This Standard does not cover the reallocation of a segment's 

share of home office expenses to contracts and other cost objectives.