Cost Accounting Standards

Here are some notes on Cost Accounting Standards (CAS) in detail:

  • Cost Accounting Standards (CAS) are a set of standards promulgated by the Cost Accounting Standards Board (CASB) to achieve uniformity and consistency in cost accounting practices.
  • CASB is an independent board within the United States Government Accountability Office (GAO). CASB was established by the Cost Accounting Standards Act of 1985 to establish and administer cost accounting standards for contractors that do business with the federal government.
  • CAS are designed to improve the accuracy and reliability of cost data used by contractors to price their contracts and to make other business decisions. CAS also help to ensure that contractors and the government have a common understanding of how costs are measured and allocated.
  • CAS are divided into 19 standards, which cover a wide range of topics, including cost accounting principles, cost allocation methods, and recordkeeping requirements.
  • CAS are mandatory for contractors that have contracts with the federal government that exceed a certain dollar threshold. These contractors are required to comply with all of the CAS that are applicable to their contracts.
  • CAS are also voluntary for other organizations that want to improve the accuracy and reliability of their cost data.

Here are some of the benefits of complying with CAS:

  • Improved accuracy and reliability of cost data: CAS help to ensure that cost data is accurate and reliable. This is important for contractors that need to price their contracts accurately and for the government to make informed decisions about procurement.
  • Increased transparency: CAS help to increase transparency in cost accounting practices. This is important for both contractors and the government to understand how costs are measured and allocated.
  • Reduced disputes: CAS help to reduce disputes between contractors and the government over cost data. This is because CAS provide a common set of rules and procedures for measuring and allocating costs.
  • Improved compliance with government regulations: CAS help to ensure that contractors comply with government regulations. This is important for contractors to avoid penalties and to maintain their government contracts.