[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: 48CFR9904.406-40]

[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
 
Sec. 9904.406-40  Fundamental requirement.

    (a) A contractor shall use this fiscal year as his cost accounting 
period, except that:
    (1) Costs of an indirect function which exists for only a part of a 
cost accounting period may be allocated to cost objectives of that same 
part of the period as provided in 9904.406-50(a).
    (2) An annual period other than the fiscal year may, as provided in 
9904.406-50(d), be used as the cost accounting period if its use is an 
established practice of the contractor.
    (3) A transitional cost accounting period other than a year shall be 
used whenever a change of fiscal year occurs.
    (4) Where a contractor's cost accounting period is different from 
the reporting period used for Federal income tax reporting purposes, the 
latter may be used for such reporting.
    (b) A contractor shall follow consistent practices in his selection 
of the cost accounting period or periods in which any types of expense 
and any types of adjustment to expense (including prior-period 
adjustments) are accumulated and allocated.
    (c) The same cost accounting period shall be used for accumulating 
costs in an indirect cost pool as for establishing its allocation base, 
except that the contracting parties may agree to use a

[[Page 348]]

different period for establishing an allocation base as provided in 
9904.406-50(e).

[57 FR 14153, Apr. 17, 1992; 57 FR 34167, Aug. 3, 1992]