D.C. Mun. Regs. tit. 27, r. 27-3321

Current through Register Vol. 71, No. 49, December 6, 2024

Rule 27-3321 - DEPRECIATION AND USE ALLOWANCES

3321.1

Normal depreciation on a contractor's plant, equipment, and other capital facilities shall be allowable. The contracting officer shall require the contractor to demonstrate that the depreciation costs are reasonable and allocable.

3321.2

Depreciation shall be considered reasonable if the contractor demonstrates the following:

(a) The methods for determining depreciation costs are consistent with those followed by businesses (other than the government) with respect to each class of property;

(b) The depreciation costs are reflected in the contractor's books of accounts and financial statements; and

(c) The depreciation costs are both used and acceptable for federal income tax purposes.

3321.3

The computation of depreciation or use allowances shall be based on acquisition costs. If acquisition costs are unknown, a reasonable estimate may be used.

3321.4

Depreciation shall be computed using any generally accepted accounting method. The method shall be consistently applied and result in equitable charges considering the use of the property.

3321.5

The contracting officer shall accept any method of depreciation which is accepted by the Internal Revenue Service.

3321.6

A use allowance shall be allowable if it is computed in accordance with an established industry or government schedule or other method mutually agreed upon by the contracting officer and the contractor.

D.C. Mun. Regs. tit. 27, r. 27-3321

Final Rulemaking published at 35 DCR 1661 (February 26, 1988)