How to Record CAS 402 Non-Compliance Costs
Records the downward adjustment or penalty resulting from a Cost Accounting Standard (CAS) 402 non-compliance regarding inconsistent cost treatment.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Revenue Adjustment - CAS Non-Compliance | Revenue | 85,000.00 | - |
| Due to Government - CAS Penalty/Interest | Liability | - | 85,000.00 |
💡 Accountant's Note
CAS 402 requires that costs incurred for the same purpose in like circumstances be treated consistently as either direct or indirect. Failure results in a price adjustment including interest.
Practitioner & Systems Framework
💻 ERP Architecture
The debit should reduce revenue to reflect the contract price reduction mandated by the Administrative Contracting Officer (ACO).
⚠️ Audit Flags
DCAA audit of the Disclosure Statement or discovery of direct-charged costs that are normally in the overhead pool.
📄 Required Documentation
DCAA Audit Report, ACO Determination of Non-Compliance, and impact calculation.
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