Federal Register #2026-17903

Final rule rescinding CAS 407 to conform with GAAP for cost accounting standards

This final rule from the Office of Management and Budget (OMB), Federal Procurement Policy Office, and Cost Accounting Standards Board addresses federal cost accounting standards: - Rescinds Cost Accounting Standard (CAS) 407 to align with Generally Accepted Accounting Principles (GAAP) - No products, services, OEMs, or vendors are involved; this is a regulatory update, not a procurement - Eliminates most requirements of CAS 407, retaining only limited provisions related to standard costs and variances at the production unit level - These provisions are transferred to CAS 418 - No part numbers, purchase quantities, or procurement actions are specified - Notable requirements: - Transfer of certain definitions - Removal of duplicative regulatory text - Streamlining cost accounting standards for federal contractors - The rule aims to reduce regulatory burden and increase uniformity in federal contract cost accounting

Description

This final rule published by the Office of Management and Budget and the Federal Procurement Policy Office rescinds Cost Accounting Standard (CAS) 407 to conform it with Generally Accepted Accounting Principles (GAAP). The rule eliminates most of CAS 407's requirements, retaining only limited provisions related to standard costs and variances at the production unit level, which are moved to CAS 418. The rule aims to reduce regulatory burden and increase uniformity by relying on GAAP and other CAS standards. The effective date of the rule is October 1, 2026.

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