How to Record CPFF Fee Withholdings
Recording the percentage of fixed fee withheld by the government (typically 15% up to a cap) until contract completion on CPFF contracts.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Billed Accounts Receivable | Asset | 8,500.00 | - |
| Contract Fee Withholds | Asset | 1,500.00 | - |
| Fixed Fee Revenue | Revenue | - | 10,000.00 |
💡 Accountant's Note
Under FAR 52.216-8, the contracting officer may withhold a portion of the fixed fee to protect the Government's interest. The full revenue is recognized, but the withheld portion is reclassified.
Practitioner & Systems Framework
💻 ERP Architecture
Configure billing terms to automatically split fee into billed and withheld accounts.
⚠️ Audit Flags
Unreconciled withhold accounts during final indirect rate settlements.
📄 Required Documentation
FAR 52.216-8 clause and monthly Progress Payment or Public Voucher (SF1034).
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Related Journal Entries
Defense, Aerospace & Government Contracting
Cost-Plus-Fixed-Fee (CPFF) Contract — Revenue Recognition as Costs Are Incurred
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Discussion & Community Questions
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