Proposed Rule2025-00012
Conformance of the Cost Accounting Standards to Generally Accepted Accounting Principles for CAS 404 Capitalization of Tangible Assets and CAS 411 Accounting for Acquisition Costs of Material
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
January 17, 2025
Issuing agencies
Management and Budget OfficeFederal Procurement Policy Office
Abstract
The Office of Federal Procurement Policy (OFPP), Cost Accounting Standards Board (CAS Board or the Board), is releasing this advanced notice of proposed rulemaking (ANPRM) to elicit public comments on proposed changes to the Cost Accounting Standards (CAS) on conformance to Generally Accepted Accounting Principles (GAAP) related to CAS 404, Capitalization of Tangible Assets, and CAS 411, Accounting for Acquisition Costs of Material, to GAAP. This ANPRM follows issuance of a Staff Discussion Paper 85 FR 58399 (September 18, 2020).
Full Text
<html>
<head>
<title>Federal Register, Volume 90 Issue 11 (Friday, January 17, 2025)</title>
</head>
<body><pre>
[Federal Register Volume 90, Number 11 (Friday, January 17, 2025)]
[Proposed Rules]
[Pages 5803-5808]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-00012]
-----------------------------------------------------------------------
OFFICE OF MANAGEMENT AND BUDGET
Office of Federal Procurement Policy
48 CFR Part 9904
Conformance of the Cost Accounting Standards to Generally
Accepted Accounting Principles for CAS 404 Capitalization of Tangible
Assets and CAS 411 Accounting for Acquisition Costs of Material
AGENCY: Cost Accounting Standards Board, Office of Federal Procurement
Policy, Office of Management and Budget.
ACTION: Advanced notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Office of Federal Procurement Policy (OFPP), Cost
Accounting Standards Board (CAS Board or the Board), is releasing this
advanced notice of proposed rulemaking (ANPRM) to elicit public
comments on proposed changes to the Cost Accounting Standards (CAS) on
conformance to Generally Accepted Accounting Principles (GAAP) related
to CAS 404, Capitalization of Tangible Assets, and CAS 411, Accounting
for Acquisition Costs of Material, to GAAP. This ANPRM follows issuance
of a Staff Discussion Paper 85 FR 58399 (September 18, 2020).
DATES: Comments must be in writing and must be received by March 18,
2025.
ADDRESSES: Submit comments to the Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. by searching for ``CASB 2020-1''. Select the link
``Comment Now'' that corresponds with ``CASB 2020-1''. Follow the
instructions provided on the ``Comment Now'' screen. Please include
your name, company name (if any), and ``CASB 2020-1'' on your attached
document. If your comment cannot be submitted using <a href="https://www.regulations.gov">https://www.regulations.gov</a>, call or email the points of contact in the FOR
FURTHER INFORMATION CONTACT section of this document for alternate
instructions. Comments received generally will be posted without change
to <a href="https://www.regulations.gov">https://www.regulations.gov</a>, including any personal and/or business
confidential information provided. Public comments may be submitted as
an individual, as an organization, or anonymously (see frequently asked
questions at <a href="https://www.regulations.gov/faq">https://www.regulations.gov/faq</a>). To confirm receipt of
your comment(s), please check <a href="https://www.regulations.gov">https://www.regulations.gov</a>,
approximately two-to-three days after submission to verify posting.
[[Page 5804]]
Privacy Act Statement: The CAS Board proposes the rule to elicit
public views pursuant to 41 U.S.C. 1502. Submission of comments is
voluntary. The information will be used to inform sound decision-
making. Please note that all comments received in response to this
document will generally be posted or released in their entirety,
including any personal and business confidential information provided.
Do not include any information you would not like to be made publicly
available. Additionally, the OMB System of Records Notice, OMB Public
Input System of Records, OMB/INPUT/01, 88 FR 20913 (available at
<a href="http://www.federalregister.gov/documents/2023/04/07/2023-07452/privacy-act-of-1974-system-of-records">www.federalregister.gov/documents/2023/04/07/2023-07452/privacy-act-of-1974-system-of-records</a>), includes a list of routine uses associated
with the collection of this information.
FOR FURTHER INFORMATION CONTACT: John L. McClung, Manager, Cost
Accounting Standards Board (telephone: 202-881-9758; email:
<a href="/cdn-cgi/l/email-protection#573d383f39793b793a34343b2239306517383a357932382779303821"><span class="__cf_email__" data-cfemail="d1bbbeb9bfffbdffbcb2b2bda4bfb6e391bebcb3ffb4bea1ffb6bea7">[email protected]</span></a>).
SUPPLEMENTARY INFORMATION:
I. Background
The Office of Federal Procurement Policy (OFPP), Cost Accounting
Standards Board (CAS Board), is releasing this Advanced Notice of
Proposed Rulemaking (ANPRM) on the conformance of CAS 404,
Capitalization of Tangible Assets, and CAS 411, CAS Accounting for
Acquisition Costs of Material, to the Generally Accepted Accounting
Principles (GAAP). In accordance with 41 U.S.C. 1502(c), the Board is
required to consult with interested persons concerning the advantages,
disadvantages, and improvements anticipated in the pricing and
administration of Government contracts as a result of the adoption of a
proposed Standard prior to the promulgation of any new or revised CAS.
On September 18, 2020, the Board published a Staff Discussion Paper
(85 FR 58399) to solicit views with respect to the Board's initial
assessment of CAS 404 and CAS 411 to conform them, where practicable,
to GAAP. Respondents were invited to comment, among other things, on
the differences identified between CAS and GAAP, the frequency and
magnitude of issues identified with CAS non-compliances, and
recommendations on any changes to the Standards to conform them to
GAAP.
This ANPRM reflects input from the public, as discussed below, as
well as research accomplished by the Board in the respective subject
areas. The Board used the side-by-side comparison of CAS and GAAP
requirements set forth in the Staff Discussion Paper to identify any
material differences. Unique CAS requirements were assessed for their
necessity in protecting the interests of the Government or if the
existing requirements in other CAS standards or requirements in other
relevant rules may protect the interests of the Government.
II. CAS 404
A. Overview
CAS 404 requires contractors, for the purposes of cost measurement,
to establish and adhere to policies with respect to capitalization of
the acquisition costs of tangible assets. CAS 404 establishes criteria
which the contractor's policies and procedures should satisfy. CAS 404
was initially published February 27, 1973 at 38 FR 5318. The preamble
for the original publication of CAS 404 acknowledged that:
Work preliminary to the development of this Standard was
initiated as the result of recognition that the general subject of
fixed asset accounting has been the source of continuing problems
between contractors and the Government concerning equitable
determinations of the costs attributable to performance of specific
contracts.
The Board ultimately decided after careful consideration of public
comments that this standard would establish the beginning point for
fixed assets and focus solely on the ``determination of the acquisition
costs to be capitalized as opposed to those which are charged against
revenues of the current period [as depreciation]''.
CAS 404 was modified in 1996 by the addition of CAS 404-50(d) to
address issues relating to the treatment of gains or losses
attributable to tangible capital assets subsequent to mergers or
business combinations by government contractors. This added language
requires tangible capital assets of an acquired company to be
capitalized by the buyer at the seller's net book value, if the assets
generated cost on government contracts in the most recent cost
accounting period prior to the business combination; otherwise, the
assets, which did not generate cost on government contracts, may be
assigned a portion of the purchase price of the acquired entity not to
exceed their fair value.
With the exception of the requirements added in 1996 by CAS 404-
50(d)(1), the principal need for the promulgation of the initial CAS
404 no longer exists. GAAP has been revised significantly with
additional content since the original promulgation of CAS 404 in 1974.
Furthermore, as explained in greater detail in the response to
public comments in subsection b., below, a comparison of CAS 404 with
pertinent GAAP content revealed significant overlap and nearly
completely equivalent requirements with the noted exception of CAS 404-
50(d). For all other requirements in CAS 404, a comparable requirement
exists in GAAP, FAR or other CAS Standard that would protect the
Government's interests and promote uniformity and consistency. The
alignment is so close as to make CAS 404 nearly duplicative of GAAP in
all cases except CAS 404-50(d)(1). Where such comparable requirements
exist between CAS and GAAP, the CAS 404 requirement can be eliminated.
In addition to the CAS 404-50(d) requirements for assets acquired
through a business combination, there are two other potential
differences between CAS and GAAP that require further consideration:
(i) the CAS requirements for a minimum capitalization threshold, and
(ii) written statements of accounting policies and practices. As
described below in subsection b., the Board has provisionally concluded
that reliance on GAAP would materially achieve uniformity and
consistency necessary for Government contracting related to these two
differences.
In summary, the Board has provisionally concluded that CAS 404,
with the exception of CAS 404-50(d)(1), has become unnecessary to
protect the Government's interests which may be achieved through
reliance on GAAP and other CAS Standards. Therefore, the Board is
considering a proposed rule that would eliminate CAS 404 and retain the
requirements CAS 404-50(d)(1) by relocating them to 9904.418-50 and
seeks comment on such action in this ANPRM. This action would be
consistent with the Board's guiding principles for conforming CAS to
GAAP because it would eliminate CAS content to minimize the burden on
contractors while protecting the interests of the Federal Government.
Furthermore, the Board's conclusion on CAS 404 would align with the
guiding principles to rely on coverage in GAAP when it would materially
achieve uniformity and consistency in cost accounting without bias or
prejudice to either party, rely on other CAS Standards which may
protect the Government's interests, and eliminate CAS coverage no
longer necessary.
[[Page 5805]]
B. Summary of Public Comments
The Board received four sets of public comments to the SDP. These
comments came from industry associations and companies. The Board
appreciates the efforts of all parties that submitted comments and
found the depth and breadth of the comments to be informative.
Responses to specific comments for CAS 404 are as follows:
1. Minimum capitalization threshold. The Board observed in the SDP
that CAS prescribes a specific ceiling for a monetary capitalization
threshold (currently not to exceed $5,000), and GAAP does not.
Comment: Four respondents provided comments to this potential
difference identified by the Board. All four stated that the conceptual
framework of GAAP would provide reasonable limitations for selecting
capitalization thresholds and consistently following them. Two
respondents also observed additional FAR requirements and market forces
that would curb unreasonably high thresholds and protect the
government's interests.
Response: Although GAAP does not provide for a specific minimum
capitalization threshold, the Board has provisionally determined that
the competitive constraints, disclosure statement requirements, and
retention of CAS 401, which requires contractors subject to CAS to
consistently follow their disclosed practices, should adequately
protect the governments interest in the absence of the current
prescriptive capitalization threshold. The risk of variations in the
capitalization threshold, given the constraints discuss further below,
would generally only result in immaterial differences in the assignment
of cost between cost accounting periods.
2. Written statements of accounting policies and practices. The
second potential difference the Board noted is the requirement to have
a written policy for capitalization. GAAP does not explicitly require a
written statement for capitalization policy; however, typically,
written documentation would exist because it would be required as
evidence of internal controls during audits of Sarbanes-Oxley
compliance and of financial reporting.
Comment: All respondents believed that written policies and
procedures would exist absent the perspective requirement currently
contained CAS. For example, in meeting the GAAP requirements,
contractors maintain conventions and guidelines for the consistent
treatment of the costs of acquiring tangible capital assets. Such
conventions represent reasonable limits and are maintained to satisfy
the GAAP requirements for consistency and accurate accounting. In
addition, contractors subject to CAS would still have to consistently
follow their disclosed practices (CAS 401) and the information would
also be included in a disclosure statement.
Response: Although GAAP does not explicitly require a written
statement for capitalization policies, the Board agrees with the
respondents and has provisionally determined that these written
statements would continue to exists in the absence of the current
explicit CAS requirement. The cumulative requirements that will remain
in CAS 401, which requires comparison of actual practices year over
year, Disclosure Statements and current practices to comply with GAAP
would adequately protect the governments interest absent the expressed
requirement to maintain policies and procedures required by CAS. In
addition, FAR and DFARs accounting system requirements also make
written policies and procedures, such as on capitalization, necessary.
3. Assets acquired through a business combination. Another
difference noted by the Board is the requirements in CAS for treatment
of tangible assets acquired in a business combination. CAS 404-50(d)
and (e) refer to two financial accounting treatments for business
combinations: ``purchase method'' and ``pooling of interest method.''
As noted in the SDP, these methods could be found in financial
accounting literature at APB Opinion 16. Subsequently, financial
accounting treatment has been revised several times.
In June 2001, FASB revised its approach for accounting for business
combinations in Statement Financial Accounting Standards No. 141, which
superseded APB Opinion 16 and adopted a single-method approach
requiring that all business combinations be accounted for by the
purchase method. The purchase method requires that the cost attributed
to the plant and equipment of the acquired entity be ``the current
replacement cost for similar capacity unless the expected future use of
the assets indicates a lower value to the acquiring entity.''
July 2009, the FASB Accounting Standards Codification (ASC) became
authoritative for GAAP, and ASC 805-20-30-1 requires acquirers to
measure tangible capital assets at the acquisition date fair values,
which would be the same as replacement value at acquisition date.
Replacement value refers to the amount a similar condition and used
asset would cost. The CAS Board notes, however, that FASB Topic 105--
Generally Accepted Accounting Principles provides APB Opinion 16 and
FASB Statement No. 141 are considered grandfathered guidance allowing
for the continued application of the superseded accounting standards
for business combination transactions that have an ongoing effect in an
entity's financial statements. As part of the codification, GAAP has
also transitioned to the term ``acquisition method'' rather than
``purchase method'' for this accounting treatment of business
combinations.
Regarding the cost treatment of tangible assets acquired in a
business combination accounted for under the purchase method, the Board
noted that under CAS 404-50(d)(2) when the acquired company has
tangible assets that did not generate depreciation or cost of money
allocated to Federal contracts the assets are assigned a portion of the
purchase price of the acquired company, not to exceed their fair value.
However, under CAS 404-50(d)(1) when the acquired company has tangible
assets that generated depreciation or cost of money allocated to
Federal contracts, the assets are measured by the acquirer at the net
book value. By comparison, for both circumstances, GAAP would require
that the assets be measured by the acquirer at fair value. Absent the
requirements of CAS 404-50(d)(1) the government would be at risk if an
asset was increased in value such that the combined depreciation
recognized by the both the acquired company and the acquiring company
for government contracts exceeds the historic cost for which the asset
was originally purchased for use.
Comment: Three respondents provided comments to this potential
difference identified by the Board. All three agreed if CAS 404 was
eliminated that this provision should be retained as a procurement
Policy in the FAR 31.205-52, as noted by the Board in the SDP. However,
all three also urged to the Board that if CAS 404 was eliminated CAS
405 should also be revised to avoid a potential unintended consequence
and harm to contractors related to inclusion of unallowable costs in
allocation bases.
Response: The Board believes this difference between CAS and GAAP
may create an exposure of unknown materiality. The Board agrees with
the commenters' observation that risk could be mitigated by a
procurement policy through modification of the FAR. However, the Board
has provisionally concluded that the underlying issue relates to the
measurement of costs and
[[Page 5806]]
therefore should be addressed by the Board. For these reasons, the
Board is considering a proposed rule that would retain the requirements
in CAS 404-50(d)(1) and move them to a new section in 9904.418-50. The
retention would also prevent the potential unintended consequence and
harm to contractors related to inclusion of unallowable costs in
allocation bases raised in the comments. This proposed action would be
consistent with the Board's guiding principles to eliminate content
from CAS where GAAP, other CAS Standards or other relevant rules may
protect the interests of the Government. In addition, the Board
provisionally concluded that moving the retained requirement to another
Standard rather than maintaining CAS 404 with minimal content would
best achieve the goal of streamlining CAS. The Board is seeking
comments on such actions in this ANPRM.
III. CAS 411
A. Overview
CAS 411, initially published May 5, 1975 at 40 FR 19425, provides
criteria for the accounting for acquisition costs of material used
during the course of a contract. CAS 411 also includes provisions on
the use of inventory costing methods. The preamble for the original
publication of CAS 411 acknowledged that--
Preliminary work on the development of this Standard resulted
from the absence of a requirement in agency regulations that the
same costing method be used for similar categories of material
within the same business unit and that the method be consistently
applied.
The principal need for the promulgation of the initial CAS 411 no
longer exists. GAAP has been revised significantly with additional
content and changes in requirements since the original promulgation of
CAS 411 in 1975. The majority of the CAS 411 standard has remained
static since the initial promulgation. The standard, however, was
corrected in 1992 (57 FR 34167) to make clear that it does not cover
accounting for the acquisition costs of tangible capital assets nor
accountability for Government-furnished materials.
Furthermore, as explained in greater detail in the response to
public comments in subsection b., below, a comparison of CAS 411 with
pertinent GAAP content revealed significant overlap and nearly
completely equivalent requirements. The Board identified that a
comparable requirement existed in GAAP, FAR or other CAS Standard that
would protect the Government's interests and promote uniformity and
consistency. The alignment is so close as to make CAS 411 nearly
duplicative of GAAP. The Board reasoned that where such comparable
requirements exist between CAS and GAAP, the CAS 411 requirement could
be eliminated.
The Board identified two potential differences between CAS and GAAP
that required further consideration. The CAS requires written
statements of accounting policies, and uses the terms ``moving'' and
``weighted'' average in relation to inventory costing methods, while
GAAP simply uses ``average''. As described below in subsection b, the
Board has provisionally concluded that reliance on GAAP would
materially achieve uniformity and consistency necessary for Government
contracting related to these two differences. In addition, as it
relates to written statements of accounting policies, contractors whose
activities that would trigger full CAS coverage and have been subject
to CAS 411 would still be required to disclose these practices as part
of their required CAS Disclosure Statement.
For the reasons stated above, the Board is considering a proposed
rule that would eliminate CAS 411 in its entirety. This action would be
consistent with the Board's guiding principles for conforming CAS to
GAAP because it would eliminate CAS content to minimize the burden on
contractors while protecting the interests of the Federal Government.
Furthermore, the Board's provisional conclusion on CAS 411 would align
with the guiding principles to rely on coverage in GAAP when it would
materially achieve uniformity and consistency in cost accounting
without bias or prejudice to either party, rely on other CAS Standards
which may protect the Government's interests, and eliminate CAS
coverage no longer necessary.
B. Summary of Public Comments
The Board received four sets of public comments to the SDP. These
comments came from industry associations and companies. The Board
appreciates the feedback. Responses to specific comments for CAS 411
are as follows:
1. Written statements of accounting policies and practices. The
Board noted that GAAP does not explicitly require written statements of
accounting policies and practices, while CAS 411-40(a) requires written
statements of accounting policies and practices for accumulating the
costs of material and for allocating costs of material to cost
objectives.
Comment: All commenters acknowledged GAAP does not explicitly
require a written statement of accounting policies and practices,
however approximately 70% of the AIA member companies surveyed and 77%
of FEI commercial companies surveyed do in fact have specific written
policies and procedures addressing this area. Commenters noted the
Board, during the promulgation of CAS 411, had acknowledged that many
companies had written policies and practices in place before the CAS
411 requirement existed. Further, companies subject to CAS 411 are also
required to submit Disclosure Statements. They also noted that
Enterprise Resource Planning (ERP) software systems would be another
existing source for written statements of accounting practices related
to how the costs of material are accumulated and allocated. ERP
software systems are used by contractors to manage their day-to-day
business activities related to material management and accounting for
such activity include documented business scripts that document how the
system works.
Response: Although GAAP does not explicitly require a written
statement for accounting policies and practices for accumulating the
costs of material and for allocating costs of material to cost
objectives, the Board has provisionally determined that these written
statements would continue to exists in the absence of the current
explicit CAS requirement. The cumulative requirements that will remain
in CAS 401, Disclosure Statements and current practices to comply with
GAAP would adequately protect the government's interest absent the
expressed requirement to maintain policies and procedures required by
CAS.
2. Average cost method for inventory costing. The second difference
noted by the Board in the SDP related to the average cost method for
measuring inventory. CAS provides for the use of the moving average
cost method or the weighted average cost method. Both of these methods
are explicitly defined in CAS 411-30, including how the cost would be
computed under each method. CAS 411-30(a)(6) defines ``moving average''
as ``an inventory costing method under which an average unit cost is
computed after each acquisition by adding the cost of the newly
acquired units to the cost of the units of inventory on hand and
dividing this figure by the new total number of units.'' CAS 411-
40(a)(7) defines ``weighted average cost'' as ``an inventory costing
method under which an average unit cost is computed periodically by
dividing the sum of the
[[Page 5807]]
cost of beginning inventory plus the cost of acquisitions by the total
number of units included in these two categories.'' By comparison, GAAP
simply provides for the use of an ``average'' method without defining
or describing specific average methods. GAAP does make clear in ASC
330-10-30-9 that ``the major objective in selecting a method [for
inventory costs] should be to choose the one which, under the
circumstances, most clearly reflects periodic income.'' The Board
understood this to mean that the method selected must result in a
measurement of costs matched against revenue from a sale. The matching
principle between cost and revenue in GAAP is similar to the CAS
concept of matching the cost to a contract--both of which result in
periodic income. As a result, although GAAP doesn't explicitly define
acceptable average methods, there is some constraint to the variations
a contractor could elect to use in compliance with GAAP.
Comment: Commenters noted the Board is correct in that GAAP does
not define specific ``average'' inventory costing methods, however
their research of various GAAP pronouncements and discussions with
member companies' GAAP accountants failed to uncover an average method
beyond weighted average and moving average methods. Additionally, 100%
of the AIA and FEI member companies surveyed use either the moving
average, weighted average or standard cost method for inventory
costing. Furthermore, in today's world, the logic behind inventory
valuation methods is built into very expensive ERP systems and is not
changed haphazardly. FEI noted that a survey of member companies showed
that changes are overwhelmingly driven (i.e., 82%) by either new ERP
system implementations/upgrades or organization type transaction
activities (e.g., M&A). None of the respondents noted they make changes
to ERP systems in order to solely change inventory valuation/costing
methods. Commenters also noted that they are not aware of any
circumstances where the use of an average method compliant with GAAP
would not be acceptable for accounting for government contracts. AIA
further noted it was not aware of an average costing method compliant
with GAAP beyond the moving average or weighted average methods. In
addition, commenters noted that the guiding principles of GAAP align
identically with the fundamental requirements of CAS 411, so even if
there was another inventory average costing method for GAAP, such
method would almost certainly be acceptable for accounting for
government contracts. GAAP's guiding principles require the use of a
consistently applied inventory method that is rational, reasonable and
matches inventory costs with revenues. Identical to GAAP, CAS 411
requires that the inventory costing method chosen must be, ``used in a
manner which results in systematic and rational costing of issues of
material to cost objectives. The same costing method shall, within the
same business unit, be used for similar categories of material.'' (Ref:
9904.411-40(e)). Commenters view the principles and requirements of
GAAP in this area are more restrictive than CAS.
Response: The Board appreciates the efforts of the associations and
their members to gather and provide this information and analysis.
Based on the comments and additional research conducted by the Board,
the Board has not identified any additional ``average'' inventory
costing methods beyond weighted or moving. The Board has provisionally
concluded that CAS 411 and the corresponding requirements in GAAP are
not materially different. Furthermore, the Board has also provisionally
concluded that GAAP, FAR and other Standards may protect the
Government's interests. Therefore, the Board is considering a proposed
rule that would eliminate CAS 411 and rely on GAAP to achieve the
uniformity and consistency required for Government contracting. This
action would be consistent with the Board's guiding principle to
eliminate content from CAS where reliance on GAAP would materially
achieve uniformity and consistency in cost accounting without bias or
prejudice to either party.
IV. Paperwork Reduction Act
The Paperwork Reduction Act, Public Law 96-511, does not apply to
ANPRM because these actions impose no paperwork burden on offerors,
affected contractors and subcontractors, or members of the public
requiring the approval of OMB under 44 U.S.C. 3501, et seq.
V. Executive Orders 12866, 13563, 14094 and the Regulatory Flexibility
Act
Executive Orders (E.O.s) 12866, 13563, and 14094 direct agencies to
assess all costs and benefits of available regulatory alternatives and,
if regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety effects, distributive impacts, and equity).
E.O. 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. The economic impact of the ANPRM is expected to be minor
because the affected contractors and subcontractors are those who are
already subject to CAS and would seek to rely more heavily on GAAP,
which these contractors are using in their commercial transactions.
Accordingly, the ANPRM is not a significant regulatory action and,
therefore, are not subject to review under section 6(b) of E.O. 12866,
Regulatory Planning and Review, as amended by E.O. 14094, Modernizing
Regulatory Review.
List of Subjects in 48 CFR 9904
Government procurement, Cost accounting standards
Christine J. Harada,
Senior Advisor Office of Federal Procurement Policy, and Chair, Cost
Accounting Standards Board, performing by delegation the duties of the
Administrator for Federal Procurement Policy.
For the reasons set forth in the preamble, The Federal Procurement
Policy Office proposes to amend 48 CFR part 9904 as set forth below:
PART 9904--COST ACCOUNTING STANDARDS
0
1. The authority citation for part 9904 continues to read as follows:
Authority: Pub. L. 100-679, 102 Stat. 4056, 41 U.S.C. 422.
Subpart 9904.404--[Removed and Reserved]
0
2. Remove and reserve subpart 9904.404.
Subpart 9904.411--[Removed and Reserved]
0
3. Remove and reserve subpart 9904.411.
0
4. In Sec. 9904.418-50, add paragraph (i) to read as follows:
Sec. 9904.418-50 Techniques for application.
* * * * *
(i) The capitalized values of tangible capital assets acquired in a
business combination shall be assigned to these assets as follows: All
the tangible capital assets of the acquired company that during the
most recent cost accounting period prior to a business combination
generated either depreciation expense or cost of money charges that
were allocated to Federal government contracts or subcontracts
negotiated on the basis of cost, shall be capitalized by the buyer at
the net book value(s) of the
[[Page 5808]]
asset(s) as reported by the seller at the time of the transaction.
[FR Doc. 2025-00012 Filed 1-16-25; 8:45 am]
BILLING CODE 3110-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on January 17, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.