In February 2020, the Government Accountability Office (GAO)
released a report on the Cost Accounting Standards (CAS)
Board's progress on modernizing the CAS—including
conforming them to the Generally Accepted Accounting Principles
(GAAP)—where appropriate. GAO found that the CAS Board is
well underway in its assigned mission; but that the CAS are likely
to persist in some form and will not be completely absorbed into a
unified GAAP-like system.
Background
Congress created the CAS Board in 1970 to promulgate standards
for accounting practices used by federal contractors. Although
GAAP's predecessor had existed since the 1930s, the federal
government faced a distinct accounting challenge that commercial
enterprises did not. The government required a reliable process by
which to allocate costs to individual contracts, whereas GAAP's
primary focus is accurate reporting of high-level financial
performance. Between 1972 and 1980, the CAS Board issued 19 CAS
covering
