48 CFR § 9904.404.20 - 9904.404.20 Purpose.

---
identifier: "/us/cfr/t48/s9904.404.20"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "48 CFR § 9904.404.20 - 9904.404.20   Purpose."
title_number: 48
title_name: "Federal Acquisition Regulations System"
section_number: "9904.404.20"
section_name: "9904.404.20   Purpose."
chapter_number: 99
chapter_name: "COST ACCOUNTING STANDARDS BOARD, OFFICE OF FEDERAL PROCUREMENT POLICY, OFFICE OF MANAGEMENT AND BUDGET"
subchapter_number: "B"
subchapter_name: "PROCUREMENT PRACTICES AND COST ACCOUNTING STANDARDS"
part_number: "9904"
part_name: "COST ACCOUNTING STANDARDS"
positive_law: false
currency: "2026-04-05"
last_updated: "2026-04-05"
format_version: "1.1.0"
generator: "[email protected]"
authority: "Pub. L. 100-679, 102 Stat. 4056, 41 U.S.C. 422."
regulatory_source: "57 FR 14153, Apr. 17, 1992, unless otherwise noted."
cfr_part: "9904"
---


# 9904.404.20 9904.404.20   Purpose.

This Standard requires that, for purposes of cost measurement, contractors establish and adhere to policies with respect to capitalization of tangible assets which satisfy criteria set forth herein. Normally, cost measurements are based on the concept of enterprise continuity; this concept implies that major asset acquisitions will be capitalized, so that the cost applicable to current and future accounting periods can be allocated to cost objectives of those periods. A capitalization policy in accordance with this Standard will facilitate measurement of costs consistently over time.