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GovCon 101: What Contractors Should Know About Accounting For Government Contracts

Source: Forbes


Generally Accepted Accounting Principles


Government contractors are required to follow generally accepted accounting principles (GAAP) issued by the Financial Accounting Standards Board (FASB). This means contractors are not permitted to apply cash basis accounting which is often used for tax preparation by small businesses not required to obtain financial statement audits. Rather, contractors must apply fully GAAP compliant, accrual-based, accounting principles when accounting for government contracts.


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