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Glossary

Cost Accounting Standards,
in plain English

CAS governs how contractors measure, assign and allocate costs on government work. For years the thresholds pulled in mid sized contractors who had not planned for it. Those figures moved substantially in 2026.

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Nineteen standards, 401 to 420Thresholds changed 30 June 2026

QUICK ANSWERCAS 401–420

19standards

Consistency rather than permission · 419 reserved

THRESHOLDS · TAP TO COMPARE

BeforeAfter 30 June 2026

CAS applies from$2.5M$35M

Full coverage$50M$100M

Certified cost or pricing data$2.5M$10M

Trigger contract$7.5MRemoved

Contracts entered into on or before 30 June 2026.Contracts entered into after 30 June 2026. Earlier awards keep their status.

MODIFIED COVERAGE STILL APPLIES

CAS 401CAS 402CAS 405CAS 406Fixed at award

DIRECT ANSWERChecked August 2026

The Cost Accounting Standards are a set of rules governing how government contractors measure, assign and allocate costs. There are nineteen standards, numbered 401 to 420 with 419 reserved. Contracts fall under full coverage, modified coverage or an exemption, and that status is fixed at award. Thresholds changed substantially for contracts entered into after 30 June 2026.

What CAS actually governs

Consistency rather than permission

CAS is often misread as a rule about which costs you may claim. It is really about doing the same thing the same way, and being able to show that you did.

Glossary • Walkthrough

Consistency rather than permission

CAS is often misread as a rule about which costs you may claim. It is really about doing the same thing the same way, and being able to show that you did.

Nineteen standards, numbered 401 to 420, with 419 reserved
Full coverage, modified coverage or an exemption, fixed at award
Disclose your practices, then follow them consistently

WHAT CAS IS ABOUT

Measurement

How much a cost is, by a consistent method rather than a convenient one.

Assignment

Which cost accounting period a cost belongs to, applied the same way each period.

Allocation

Which contract or cost objective bears the cost, on a consistent and disclosed basis.

04MOST TESTED

Disclosure

Writing your practices down and then following them.

WHERE MOST ENFORCEMENT PRESSURE ACTUALLY SITS: DISCLOSURE

CAS is about	In practice
Measurement	How much a given cost is, determined by a consistent method rather than a convenient one.
Assignment	Which cost accounting period a cost belongs to, applied the same way each period.
Allocation	Which contract or cost objective ultimately bears the cost, on a consistent and disclosed basis.
Disclosure	Writing your practices down and then following them, which is where most enforcement pressure actually sits.

Full and modified coverage

Two levels, decided at award

Coverage is determined per contract on the date of award and does not change afterwards. A modification, however large, does not alter the status of the contract it modifies.

	Full coverage	Modified coverage
Standards applied	All nineteen standards	A subset: CAS 401, 402, 405 and 406
What that subset covers		Consistency in estimating and reporting, consistent treatment of costs incurred for the same purpose, accounting for unallowable costs, and the cost accounting period
Disclosure Statement	Generally required	Generally not required at this level
Practical burden	Substantial and ongoing	Real but far narrower

A reprieve from full coverage is not a reprieve from CAS. Modified coverage still carries genuine obligations, and the four standards it applies are the ones most often tested.

The 2026 changes

Thresholds moved a long way

Sections 1804 and 1806 of the FY2026 National Defense Authorization Act revised the figures for contracts entered into after 30 June 2026. Existing covered contracts do not become exempt retrospectively.

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The challenge

Before the change

CAS applied from a contract value of $2.5 million, and a single mid sized award could pull a company into coverage through the trigger contract mechanism at $7.5 million.

Applies from$2.5M

Trigger mechanism$7.5M

EffectMid sized firms caught

With ProcureAudit

After 30 June 2026

CAS applies from a contract value of $35 million and the trigger contract mechanism is removed, so most negotiated contracts below that figure fall outside coverage.

Applies from$35M

Trigger mechanismRemoved

EffectFar fewer covered

The challenge

Before the change

Full coverage attached at $50 million of CAS covered awards in a cost accounting period, which many growing contractors reached sooner than expected.

Threshold$50M

ReachedSooner than planned

BurdenAll nineteen standards

With ProcureAudit

After 30 June 2026

The full coverage threshold rises to $100 million, allowing a number of contractors currently under full coverage to move to modified coverage.

Threshold$100M

EffectSome move to modified

Still appliesCAS 401, 402, 405, 406

The challenge

Before the change

The threshold for requiring certified cost or pricing data sat at $2.5 million, bringing a wide band of awards into formal disclosure and defective pricing exposure.

Threshold$2.5M

ExposureWide band

BurdenPre-award disclosure

With ProcureAudit

After 30 June 2026

The threshold rises to $10 million for contracts entered into after that date, removing that requirement from awards in the intervening band.

Threshold$10M

Applies toContracts after 30 June 2026

Earlier awardsUnchanged

The challenge

The obligations themselves

Fewer contracts are covered, but the standards themselves are unchanged and a covered contract carries exactly the obligations it always did.

StandardsUnchanged

Covered contractsSame duties

Retrospective reliefNone

With ProcureAudit

Disclosure and consistency

The core expectation is unchanged: disclose your practices and then follow them consistently. That is what gets tested, whatever the threshold.

ExpectationDisclose and follow

TestedConsistently

UnaffectedBy thresholds

Where CAS meets purchasing

Four points that touch the purchase file

Glossary • Walkthrough

Four points that touch the purchase file

The CAS clause requires its substance to be included in negotiated subcontracts above the applicable threshold, so this is a purchasing question and not only an accounting one.

CAS reaches negotiated subcontracts
Certified cost or pricing data
Coverage is fixed at award

NEGOTIATED SUBCONTRACT

What the purchase file holds

4 OF 4

CAS CLAUSE

Substance included in the subcontract

Above the applicable threshold

COST OR PRICING DATA

Analysis and certificate on file

Not only in the accounting records

COVERAGE

Status recorded at the award date

Answers the question years later

CONSISTENCY

Same approach across files and buyers

The same expectation CAS sets

A PURCHASING RECORD HOLDS THE EVIDENCE · CAS OBLIGATIONS STAY WITH YOUR ACCOUNTING

CAS reaches negotiated subcontracts

The CAS clause requires its substance to be included in negotiated subcontracts above the applicable threshold, so this is a purchasing question and not only an accounting one.

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Certified cost or pricing data

Where it is required on a subcontract, the analysis and the certificate belong in the purchase file rather than only in the accounting records.

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Coverage is fixed at award

Because status is set on the award date, the record of what applied at that moment is what answers the question years later.

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Consistency is the test

The same expectation runs through purchasing: doing the same thing the same way, and being able to show it across files and across buyers.

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FAQ

Common questions about CAS

What are the Cost Accounting Standards?

A set of rules governing how government contractors measure costs, assign them to accounting periods and allocate them to contracts. There are nineteen standards numbered 401 to 420, with 419 reserved. The underlying requirement is to disclose your practices and follow them consistently.

What is the difference between full and modified CAS coverage?

Full coverage applies all nineteen standards and generally requires a Disclosure Statement. Modified coverage applies four: CAS 401, 402, 405 and 406, covering consistency in estimating and reporting, consistent treatment of costs incurred for the same purpose, unallowable costs, and the cost accounting period.

Did CAS thresholds change in 2026?

Yes, substantially. For contracts entered into after 30 June 2026, CAS applies from $35 million rather than $2.5 million, the full coverage threshold rises from $50 million to $100 million, and the trigger contract mechanism is removed.

Did the certified cost or pricing data threshold change too?

Yes. It rises from $2.5 million to $10 million for contracts entered into after 30 June 2026. Contracts entered into on or before that date keep the earlier threshold.

Do existing contracts become exempt?

No. The revised thresholds apply to contracts entered into after 30 June 2026. A contract awarded earlier keeps the coverage status determined at its award, and modifications do not change it.

Does CAS affect our subcontractors?

It can. The CAS clause requires its substance to be included in negotiated subcontracts above the applicable threshold, which makes it a purchasing responsibility as much as an accounting one.

Can coverage differ between our own contracts?

Yes, and it commonly does. Status is determined per contract at award, so a company can hold contracts under full coverage, modified coverage and no coverage at the same time.

Does a purchasing workspace handle CAS for us?

No, and nothing should claim to. CAS obligations sit with your accounting practices and your disclosure. What a purchasing record can do is hold the analysis, certificates and reasoning behind each subcontract so the evidence exists when it is asked for.