CAS 420 – Accounting for Independent Research & Development (IR&D) Costs and Bid & Proposal (B&P) Costs (Part 2 of 3)

*This is Part 2 of a 3-part blog.  Each part addresses the fundamental requirements and techniques for application related to the standard, and provides specific examples. Part 1 addressed the overall purpose of the standard, as well as the requirements/techniques for the accumulation of IR&D and B&P costs. This Part 2 addresses the allocation of IR&D and B&P costs, except for special allocations. Part 3 will address special allocations of IR&D and B&P costs.   Background: As stated at CAS 420-20, the purpose of the standard is to provide criteria for the accumulation of IR&D and B&P costs, and for the allocation of such costs to cost objectives based on the beneficial or causal relationship between such costs and cost objectives.   Allocation of IR&D and B&P … Continue reading