On September 11, 2025, the CAS Board released a notice of proposed rulemaking (NPRM) to address the conformance of CAS 404, 408, 409, and 411 to GAAP. The NPRM follows advance notices of proposed rulemaking issued on June 27, 2024 and January 17, 2025. The CAS Board’s proposals are summarized as follows:

• CAS 404, Capitalization of Tangible Assets: Eliminate CAS 404 and retain the requirements in CAS 404-50(d)(1), which addresses the treatment of gains and losses attributable to tangible capital assets subsequent to mergers or business combinations. The CAS Board proposed to retain the CAS 404-50(d)(1) requirements by relocating them to a new paragraph 9904.406-50(g).
• CAS 408, Accounting for Costs of Compensated Personal Absence: Eliminate CAS 408 in its entirety.
• CAS 409, Depreciation of Tangible Capital Assets: Eliminate CAS 409 and retain the requirements of CAS 409-50(e)(5), CAS 409-50(j)(1), and CAS 409-50(j)(4) by relocating them to a new paragraph 9904.406-50(g).
• CAS 411, Accounting for Acquisition Costs of Materials: Eliminate CAS 411 in its entirety. The NPRM states that the government’s interests are protected through reliance on GAAP, other CAS Standards, and FAR Subpart 31.205-26, Material Costs.

The NPRM also addresses whether and to what extent the elimination of these standards would change a contractor’s disclosed cost accounting practices. No CAS practice changes are expected for the deletions of CAS 404, 409, and 411, so any change made by a contractor would be unilateral. For CAS 408, any changes required to align accounting practices with GAAP would be considered immaterial and exempted from the cost impact process.

Comments on the NPRM were required to be received in writing by October 14, 2025. The NPRM can be found here.