Government Contracting: Contractor Promotional Advertising Costs Are Unallowable
Abstract
The government policy on the allowability of these costs, as set forth in the Federal Acquisition Regulation (FAR), is that such costs are unallowable charges to government contracts. The contractors we visited treat promotional advertising costs as an unallowable charge to government contracts in accordance with the FAR. Cost Accounting Standard (w) 405, Accounting for Unallowable Costs, provides that costs that are expressly unallowable shall be identified and excluded from any billing claim or proposal applicable to a government contract. Contractor accounting and advertising officials were aware that promotional advertising costs, such as those in question here, cannot be charged to government contracts, Current accounting policies and procedures at each of the contractors we visited require that these advertising costs be placed in unallowable accounts. The advertising costs examined were properly charged to corporate accounts and clearly labeled as not to be allocated to government contracts. complying with both the FAR and CAS 405.
Document Details
- Document Type
- Technical Report
- Publication Date
- Apr 01, 1990
- Accession Number
- AD1151806
Entities
People
- Carol S. Markson
- Clark G. Adams
- Kenneth R Rupar
- Thad L Hecht
Organizations
- United States Government Accountability Office