For non-severable contracts, charges are typically applied to

For non-severable contracts, charges are typically applied to

• A. The FY in which it is made
• B. The following FY
• C. The prior FY
• D. The next fiscal cycle

Answer: (A)

Non-severable contracts are treated as a single, indivisible obligation. The government commits funding at the time the contract is awarded, and the payment covers the entire contracted work in one outcome, not in separate parts over years. Because the obligation is established in that award year, charges are recorded in the fiscal year in which the contract is made. If the work could be divided into multiple deliverables that are performed in different years, it would be treated as severable, and costs would be allocated to the years in which the portions are performed.

Non-severable contracts are treated as a single, indivisible obligation. The government commits funding at the time the contract is awarded, and the payment covers the entire contracted work in one outcome, not in separate parts over years. Because the obligation is established in that award year, charges are recorded in the fiscal year in which the contract is made. If the work could be divided into multiple deliverables that are performed in different years, it would be treated as severable, and costs would be allocated to the years in which the portions are performed.