[Code of Federal Regulations]
[Title 48, Volume 7]
[Revised as of October 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR9904.403-20]

[Page 335]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
     CHAPTER 99--COST ACCOUNTING STANDARDS BOARD, OFFICE OF FEDERAL 
           PROCUREMENT POLICY, OFFICE OF MANAGEMENT AND BUDGET
 
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.