federal acquisition regulation cost principles

Industry2

1. 912-10Overall912 Contractors—Federal Government

   ASC 912-10 is the Overall subtopic of the Contractors—Federal Government Topic, which layers incremental industry guidance on top of otherwise applicable GAAP for entities doing business with the U.S. federal government. It explains that the federal customer is a sovereign that procures under statutes and regulations governing contractor selection, monitoring, and payment, creating risks not present in commercial dealings. Its scope covers all entities with federal government contracts, specifically cost-plus-fixed-fee contracts and fixed-price war and defense supply contracts terminated for the convenience of the government.

2. 912-20Contract Costs912 Contractors—Federal Government

   ASC 912-20 governs how contractors with the federal government account for contract costs, including the requirement to follow Federal Acquisition Regulation cost principles when costs are analyzed in the procurement process. It addresses allocation of indirect costs, recording of subcontractor/vendor claims, accounting for terminations (convenience versus default), and restricts the use of program accounting. Losses from default terminations are treated as changes in accounting estimate in the current period, not as prior-period adjustments.