Government Discovers Businesses Use Different Accounting Than Them
Published Date: 1/17/2025
Proposed Rule
Summary
The government wants to update rules on how companies count the cost of big stuff they buy and use, like machines and materials, to match regular accounting rules. If you’re a business working with federal contracts, these changes could affect how you report costs. You’ve got until March 18, 2025, to share your thoughts before any new rules kick in.
Analyzed Economic Effects
4 provisions identified: 3 benefits, 1 costs, 0 mixed.
Business-combination asset rule kept
If your company buys another company and you work on Federal contracts, tangible assets that during the most recent cost accounting period generated depreciation or cost-of-money charges allocated to Federal contracts must be capitalized by the buyer at the seller's net book value. The Board proposes to retain this requirement (CAS 404-50(d)(1)) and move it to 9904.418-50(i).
Eliminate CAS 404; rely on GAAP
If you are a business that works on Federal contracts and follow Cost Accounting Standards (CAS), the Board is proposing to remove CAS 404 (subpart 9904.404) so contractors would rely more on Generally Accepted Accounting Principles (GAAP) instead. The Board would keep only the special CAS 404-50(d)(1) rule and move it into 9904.418-50(i).
Eliminate CAS 411; rely on GAAP for materials
If you are a Federal contractor, the Board is proposing to remove CAS 411 (subpart 9904.411) so accounting for acquisition costs of material and inventory costing will rely on GAAP, FAR, or other CAS standards instead. The Board found CAS 411 largely duplicates GAAP and would eliminate it to reduce contractor burden.
Possible end of $5,000 capitalization ceiling
CAS currently prescribes a monetary capitalization ceiling 'not to exceed $5,000' for minimum capitalization thresholds, but GAAP does not set a specific dollar ceiling. The Board is provisionally concluding that reliance on GAAP (plus CAS 401 and disclosure rules) could replace the CAS $5,000 ceiling.
Personalized for You
How does this regulation affect your finances?
Personalize government policy and PRIA will tell you what this federal register document means for your household, plus every other regulation we track. PRIA reads each provision against your financial profile to show you exactly what matters to your wallet.
Key Dates
Related Federal Register Documents
2026-17655, Passports: Expanding Online Passport Renewal Overseas
The Department proposes to amend 22 CFR 51.21 by consolidating requirements for persons applying by mail and online in the United States and overseas. This proposed change includes expanding online passport application availability to qualified applicants located in foreign countries. In addition, the Department is proposing to remove the requirement that an applicant's most recently issued passport must have a year or less of remaining validity to qualify to submit an online passport application. Finally, the Department is proposing technical corrections to 51.8(b) to change "on-line" to read "online" for consistency.
2026-17609, Airworthiness Directives; Embraer S.A. Airplanes
The FAA proposes to adopt a new airworthiness directive (AD) for certain Embraer S.A. Model EMB-545 and EMB-550 airplanes. This proposed AD was prompted by the possibility of the Ram Air Turbine (RAT) compartment door seal peeling off and becoming entangled with the RAT rotor. This proposed AD would require replacement of the RAT compartment door seal. The FAA is proposing this AD to address the unsafe condition on these products.
2026-17641, Federal Sector Equal Employment Opportunity
The Equal Employment Opportunity Commission (EEOC) proposes revising Federal sector EEO complaint rules to streamline processing, improve effectiveness, and implement the Cummings Act. The rule would end mandatory pre complaint counseling and remove the option to request administrative judge proceedings before a final agency decision. Complainants could seek such proceedings only on appeal, and the EEOC would order them only when necessary or efficient. The rule would bar administrative class complaint adjudication while preserving putative class assertions for exhaustion. The rule also allows joint processing of related individual complaints and updates pleading standards, mixed case procedures, attorney fee provisions, and required reports.
2026-17649, Disclosure of Information; Extension of Comment Period
The FDIC is extending the public comment period on the proposed rule "Disclosure of Information," which was published in the Federal Register on June 30, 2026. FDIC is extending the public comment period from August 31, 2026, to October 5, 2026, to provide interested parties with additional time to analyze the proposal and prepare comments.
2026-17661, Special Conditions: Skyryse, Robinson Helicopter Company Model R66 Helicopter; Control Margin Awareness
This action proposes special conditions for the Robinson Helicopter Company (Robinson) Model R66 helicopter. This helicopter, as modified by Skyryse, will have a novel or unusual design feature when compared to the state of technology envisioned in the airworthiness standards for normal category helicopters. This design feature replaces the mechanical flight controls with a digital fly-by-wire FBW system. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These proposed special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
2026-17499, Air Plan Approval; Oklahoma; Regional Haze Plan for the First Implementation Revision; Revision to State Implementation Plan and Requirements
Pursuant to the Federal Clean Air Act (CAA or the Act), the Environmental Protection Agency (EPA) is proposing to approve the State implementation plan (SIP) revision submitted by the State of Oklahoma on March 12, 2026, (Oklahoma's 2026 SIP submission) for the regional haze program's first implementation (planning) period. Oklahoma's 2026 SIP submission revises previously approved source-specific requirements for the American Electric Power/Public Service of Oklahoma (AEP/PSO) Northeastern Power Station as part of the State's long-term strategy for the first planning period. The EPA is proposing to find that this SIP revision meets the requirements of the CAA and the Regional Haze Rule.
Previous / Next Documents
Previous: 2024-31570, Defense Federal Acquisition Regulation Supplement: Inflation Adjustment of Acquisition-Related Thresholds (DFARS Case 2024-D002)
The Department of Defense is updating its buying rules to keep up with inflation by raising certain dollar limits for contracts and purchases starting in 2025. This affects companies and contractors working with the DoD, making sure thresholds reflect current prices using the Consumer Price Index. Some special rules won’t change, and the public can comment on these updates until March 18, 2025.
Next: 2025-00115, Air Plan Revisions; Arizona; Arizona Department of Environmental Quality
The EPA is proposing to approve new rules from Arizona that aim to reduce dust pollution from farming in Pinal County. These changes update laws and definitions to better control tiny dust particles that can harm air quality. People can share their thoughts by February 18, 2025, before the EPA makes a final decision.