Cost Accounting Standards
Disclosure Statements, and the discipline of actually following them.
If you have triggered CAS coverage, your Form CASB DS-1 describes the cost accounting practices you are then required to follow consistently. We prepare it, and we handle the cost impact when practices change.
- 12 years inside DCAA
- 100+ DoD contractors audited
- CPA led
- QuickBooks, Costpoint, SAP & NetSuite
- Remote, nationwide
When CAS coverage and disclosure apply
The Cost Accounting Standards govern how contractors measure, assign, and allocate cost on covered government contracts. Coverage is triggered by the value of CAS-covered awards you hold, and it comes in two forms. Modified coverage applies a limited subset of the standards. Full coverage applies all of them and, above the disclosure threshold, requires you to file a Disclosure Statement.
The Disclosure Statement, Form CASB DS-1, is a formal written description of your cost accounting practices: how you classify direct and indirect cost, how your pools and bases are built, how you handle depreciation, compensation, and a great deal else. It is submitted to the cognizant contracting officer and reviewed by DCAA for adequacy and compliance.
The part that surprises contractors is what happens next. Once disclosed, those are the practices you are required to follow. Changing them, even for a sensible business reason, is a change in cost accounting practice, and it can require a cost impact analysis and an adjustment if the change affects the government. Many contractors reach CAS coverage without realizing consistency is now a legal obligation rather than a preference.
What we handle
Coverage determination
Whether you are CAS covered at all, modified or full, and whether you have crossed the disclosure threshold. Getting this wrong in either direction is expensive.
DS-1 preparation
Preparation of the Disclosure Statement across all parts, describing practices as they are actually performed rather than as an idealized version nobody follows.
Adequacy and compliance review
Support through the DCAA review, responding to questions on adequacy and on whether disclosed practices comply with the standards.
Cost impact analysis
When a practice changes, the general dollar magnitude and detailed cost impact analysis required to quantify the effect on covered contracts.
Practice change management
Planning changes deliberately, so a system improvement does not turn into an unexpected liability to the government.
Noncompliance resolution
Where a noncompliance has been asserted, quantifying it and working the resolution with the contracting officer.
How we approach it
Determine coverage
We assess your award portfolio against the coverage and disclosure thresholds and document the conclusion.
Map actual practice
We document how you really account for cost today, which frequently differs from what anyone assumed.
Draft the DS-1
Written accurately and, where the standards allow latitude, written to preserve flexibility rather than lock you in unnecessarily.
Submit and support review
Through the adequacy determination and any compliance questions that follow.
Maintain it
Practices drift. We keep the disclosure current so a routine change does not become a noncompliance.
Questions
Frequently asked
How do we know if we are CAS covered?
It depends on the value and type of your CAS-covered awards, and there are significant exemptions, including for small businesses and for commercial items. Coverage is determined contract by contract and then aggregated, so it is worth confirming rather than assuming.
Are small businesses exempt from CAS?
Small business awards are exempt from CAS coverage. The practical trap is that companies outgrow small business status while still operating as though the exemption applies. That transition deserves attention before it happens.
What is a cost impact analysis?
When you change a disclosed cost accounting practice, you must quantify the effect on your CAS-covered contracts. If the change increases cost to the government in the aggregate, an adjustment is generally required. This is why changes should be modeled before implementation.
Can we change our practices after disclosing them?
Yes, but deliberately and with notice. Changes are permitted and sometimes required. What causes problems is changing quietly and discovering later that the change was both undisclosed and financially adverse to the government.
What happens if our Disclosure Statement is found inadequate?
You revise and resubmit. Inadequacy is a completeness and clarity finding rather than an accusation, and it is normally straightforward to resolve. A compliance finding, meaning a disclosed practice that does not comply with the standards, is more serious.
More
Related services
Guide: TINA and CAS thresholds after the FY2026 NDAA
CAS coverage now starts at $35 million and full coverage at $100 million. What that means for your Disclosure Statement.
DFARS business systems
Business system withholding applies on CAS-covered contracts. How the six systems are reviewed and what a material weakness costs.
Guide: nontraditional defense contractors
No fully CAS-covered DoD contract in the past year means Section 1826 exemptions. How that status works and how it is lost.
DCAA-compliant accounting systems
Design, configure, and document a system that meets DFARS 252.242-7006 and survives a system review.
SF 1408 pre-award surveys
Get your accounting system judged adequate so you can accept a cost-type award.
Incurred cost submissions
Adequate ICE submissions filed on time, with schedules that reconcile the first time.
Indirect cost rate structures
Pool design, allocation bases, provisional billing rates, and the annual true-up.
Contract pricing & proposal support
Cost volumes and basis of estimate for FFP, cost-reimbursable, and T&M solicitations.
Government audit support
Preparation and representation for DCAA and DCMA audits and buying command cost analysis.
Forward pricing rates (FPRP & FPRA)
Forward pricing rate proposals and agreements so every future bid prices faster and with less argument.
Post-award & business system reviews
DFARS 252.242-7006 reviews, material weaknesses, payment withholding, and corrective action.
Terminations, REAs & claims
Termination settlement proposals and requests for equitable adjustment. Frequently underclaimed.
Approaching or already under CAS coverage?
Tell us your contract portfolio and whether you have filed before. We will confirm your coverage position and what is actually required of you.