How to Record DFARS Data Rights Royalties
Records the royalty payments made for the use of proprietary data or intellectual property required to execute a defense contract.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Direct Contract Costs - License & Royalties | Expense | 25,000.00 | - |
| Accrued Royalty Liabilities | Liability | - | 25,000.00 |
💡 Accountant's Note
Royalties are allowable under FAR 31.205-37 provided they are necessary for contract performance and do not exceed reasonable rates.
Practitioner & Systems Framework
💻 ERP Architecture
Charge to a specific ODC (Other Direct Cost) category within the project ledger.
⚠️ Audit Flags
DCAA inquiry into whether the government already has 'Unlimited Rights' or 'Government Purpose Rights' to the data, which would make the royalty unallowable.
📄 Required Documentation
Licensing agreement and determination of the government's data rights status.
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Discussion & Community Questions
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