How to Record Defense Subcontract Closeout Adj
Records the final adjustment to subcontractor costs following a DCAA audit or the settlement of final indirect rates for a closed-out subcontract.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Accounts Payable - Subcontractors | Debit | 4,200.00 | - |
| Direct Subcontractor Expense (Adjustment) | Credit | - | 4,200.00 |
💡 Accountant's Note
Reflects a downward adjustment in subcontract costs when the subcontractor's final audited indirect rates are lower than the provisional rates used for billing.
Practitioner & Systems Framework
💻 ERP Architecture
Perform adjustment in the purchasing or project accounting module to ensure final contract cost integrity.
⚠️ Audit Flags
Difference between cumulative billings and final negotiated price.
📄 Required Documentation
Subcontractor release form, final invoice, and rate settlement agreement.
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Discussion & Community Questions
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