On September 11, 2025, the CAS Board issued a final rule to address CAS’s conformance with GAAP regarding operating revenue and lease accounting. The final rule follows a June 27, 2024 NPRM.

Regarding operating revenue, the CAS Board concluded that the definition of “operating revenue” in CAS and the definition of “revenue” in GAAP are essentially equivalent. Therefore, the CAS Board removed the operating revenue definition in CAS and will rely on the GAAP definition of revenue. The CAS Board concluded that properly disclosing accounting changes to rely on the GAAP definition represents a 48 CFR 9903.201-4(a) required change and is exempt from the cost impact process.

Regarding lease accounting, the final rule clarifies which assets should be included in the calculation of facilities capital cost of money (i.e., leases, which are right-of-use assets, should be excluded). The final rule also changes the definition of “intangible capital asset” in 48 CFR 9904.414-30(a)(4) and 48 CFR 9904.417-30(a)(1). The new definition states that it includes right-of-use assets acquired under leases. Additionally, a conforming change was made to CFR 9904.403-50(c)(1)(iii) to clarify that the asset component of the three-factor formula is to be calculated based on the percentage of the average net book value of the sum of the segment’s tangible capital assets, plus right-of-use assets acquired in finance leases, plus inventories to the total average net book value of such assets of all segments.

The final rule became effective on October 14, 2025. The September 11 final rule can be found here.