ABSTRACT
This chapter discusses the principles and norms for determining costs applicable to grants, contracts, and other agreements between the federal government and educational institutions, nonprofit organizations, and state, local, and Indian tribal governments. It focuses on three types of grantee organizations. These organizations are colleges and universities, nonprofit organizations, and state, local, and federally recognized Indian tribal governments. Cost accounting principles and norms (CAPN) are the set of principles used for determining costs applicable to grants, contracts, and other agreements with the federal government. The successful application of CAPN requires the development of a mutual understanding between representatives of grantee institutions and the federal government as to their scope, implementation, and interpretation of these costs. The application of CAPN is an important and complex undertaking. IAS 20 is primarily focused on the appropriate recognition of government grants as income; however, the standard directly ties the grants recognition as income with the cost of providing an operational activity.
