FAR and DFARS › FAR Part 31: Contract Cost Principles and Procedures › Subpart 31.2
FAR 31.205-20 Interest and other financial costs.
The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.
In plain English
This section makes interest on borrowings and most other financial costs unallowable for government reimbursement, with a specific exception for certain interest charged by state or local taxing authorities. Contractors need to know these costs generally cannot be included in their indirect rates or claims.
Applies to: Contractors claiming or negotiating costs under government contracts
Key terms: Interest on borrowings · Bond discounts · Costs of financing and refinancing capital · Unallowable · Interest assessed by State or local taxing authorities
Written by AI from this section's text. A guide, not legal advice: the text below rules.
The text
Interest on borrowings (however represented), bond discounts, costs of financing and refinancing capital (net worth plus long-term liabilities), legal and professional fees paid in connection with preparing prospectuses, and costs of preparing and issuing stock rights are unallowable (but see 31.205-28). However, interest assessed by State or local taxing authorities under the conditions specified in 31.205-41(a)(3) is allowable.
← 31.205-19 Insurance and indemnification. · 31.205-21 Labor relations costs. →
Rule changes for FAR Part 31
- Federal Acquisition Regulation; Technical Amendments ↗ · final rule 2024-04-22 · effective 2024-05-22
Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.