48 CFR § 9904.420-40 - 9904.420-40 Fundamental requirement.

---
identifier: "/us/cfr/t48/s9904.420-40"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "48 CFR § 9904.420-40 - 9904.420-40   Fundamental requirement."
title_number: 48
title_name: "Federal Acquisition Regulations System"
section_number: "9904.420-40"
section_name: "9904.420-40   Fundamental requirement."
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: "2026-03-24"
last_updated: "2026-03-24"
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"
---


# 9904.420-40 9904.420-40   Fundamental requirement.

(a) The basic unit for the identification and accumulation of Independent Research and Development (IR&D) and Bid and Proposal (B&P) costs shall be the individual IR&D or B&P project.

(b) The IR&D and B&P project costs shall consist of all allocable costs, except business unit general and administrative expenses.

(c) The IR&D and B&P cost pools consist of all IR&D and B&P project costs and other allocable costs, except business unit general and administrative expenses.

(d) The IR&D and B&P cost pools of a home office shall be allocated to segments on the basis of the beneficial or causal relationship between the IR&D and B&P costs and the segments reporting to that home office.

(e) The IR&D and B&P cost pools of a business unit shall be allocated to the final cost objectives of that business unit on the basis of the beneficial or causal relationship between the IR&D and B&P costs and the final cost objectives.

(f)(1) The B&P costs incurred in a cost accounting period shall not be assigned to any other cost accounting period.

(2) The IR&D costs incurred in a cost accounting period shall not be assigned to any other cost accounting period, except as may be permitted pursuant to provisions of existing laws, regulations, and other controlling factors.