FAR and DFARS › FAR Part 31: Contract Cost Principles and Procedures › Subpart 31.2
FAR 31.205-52 Asset valuations resulting from business combinations.
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 limits how contractors may claim depreciation, amortization, and cost of money on assets acquired through a business combination accounted for under the purchase method. For tangible assets, those costs must be based on capitalized values measured under 48 CFR 9904.404-50(d) and must be allocable, reasonable, and otherwise allowable. For intangible assets, allowable amortization and cost of money are capped at what would have been allowed if the business combination had not occurred.
Applies to: Contractors claiming depreciation, amortization, or cost of money on assets acquired through a business combination using the purchase method of accounting
What it requires
- Base allowable depreciation and cost of money for tangible capital assets on capitalized asset values measured and assigned under 48 CFR 9904.404-50(d)
- Ensure those tangible asset costs are allocable, reasonable, and not otherwise unallowable
- Limit allowable amortization and cost of money for intangible capital assets to the total amounts that would have been allowed had the business combination not taken place
Key terms: purchase method of accounting · business combination · tangible capital assets · intangible capital assets · cost of money
Written by AI from this section's text. A guide, not legal advice: the text below rules.
The text
(a) For tangible capital assets, when the purchase method of accounting for a business combination is used, whether or not the contract or subcontract is subject to CAS, the allowable depreciation and cost of money shall be based on the capitalized asset values measured and assigned in accordance with 48 CFR 9904.404-50(d), if allocable, reasonable, and not otherwise unallowable.
(b) For intangible capital assets, when the purchase method of accounting for a business combination is used, allowable amortization and cost of money shall be limited to the total of the amounts that would have been allowed had the combination not taken place.
← 31.205-51 Costs of alcoholic beverages. · 31.301 Purpose. →
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.