How to Record Economic Price Adjustments
Recording increases in contract value due to Economic Price Adjustment (EPA) clauses triggered by market volatility.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Unbilled Receivables - EPA | Asset | 45,000.00 | - |
| Contract Revenue - EPA Clause | Revenue | - | 45,000.00 |
💡 Accountant's Note
This entry recognizes additional revenue earned through an EPA clause (FAR 52.216-4) which adjusts the contract price based on fluctuations in labor or material indices.
Practitioner & Systems Framework
💻 ERP Architecture
Create a specific revenue category for EPA to distinguish from core performance milestones.
⚠️ Audit Flags
Large swings in Bureau of Labor Statistics (BLS) indices used for the adjustment.
📄 Required Documentation
Official index data (e.g., PPI, CPI) and the EPA calculation formula from the contract.
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