Allowable Costs
The tests of allowability of costs are: (a) they must be reasonable; (b) they must be allocable to sponsored agreements under sponsor-defined principles and methods ; (c) they must be given consistent treatment through application of those generally accepted accounting principles appropriate to the circumstances; and (d) they must conform to any limitations or exclusions set forth in sponsor policies or in the sponsored agreement as to types or amounts of cost items. (Ref. modified from A-21, C.2)