How to Account for IR&D Costs
Records Independent Research and Development (IR&D) costs for inclusion in indirect rate calculations.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| IR&D Expense Pool | Expense | 25,000.00 | - |
| Research Materials Inventory | Asset | - | 15,000.00 |
| Accrued Payroll | Liability | - | 10,000.00 |
💡 Accountant's Note
IR&D is a requirement for maintaining technical competency in defense. These costs are allowable if they meet the criteria of FAR 31.205-18.
Practitioner & Systems Framework
💻 ERP Architecture
Microsoft Dynamics 365 for Defense (Project Operations) tracks these in a separate cost pool.
⚠️ Audit Flags
Inclusion of IR&D costs that are actually required by a specific contract (Direct Research).
📄 Required Documentation
Technical IR&D project description and annual summary report to the DCAA/DCMA.
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Discussion & Community Questions
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