Case Study: Cost Accounting for Software Related Costs To Be Sold, Leased, or Marketed
A Case Study by the Redstone Government Consulting Team
Does Federal Acquisition Regulations (FAR) or Cost Accounting Standards (CAS) provide specific requirements when it comes to accounting for costs related to software to be sold, leased, or marketed in the future? The simple answer is “no”, however, a review of FAR Part 31 certainly supports that the cost is allowable and allocable to both individual contracts and as a benefit to more than one contract, based on the nature of the software related effort, provided the cost is reasonable. For the purposes of this whitepaper, we are going to assume the cost is reasonable in both nature and amount based on the prudent person in the conduct of competitive business test in FAR 31.201-3, determining reasonableness.
