How to Record Export License Denial Costs
Accounting for the write-off of deferred proposal or pre-contract costs when an ITAR or EAR export license is officially denied.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Loss on Contract Pursuit (Unallowable) | Expense | 12,500.00 | - |
| Deferred Export Compliance Costs | Asset | - | 12,500.00 |
💡 Accountant's Note
When an export license is denied, costs previously capitalized or deferred in anticipation of a foreign sale must be expensed. These are generally treated as unallowable 'selling' or 'loss' costs under FAR 31.205-38.
Practitioner & Systems Framework
💻 ERP Architecture
Journal entry to clear the asset account and move to a 9000-series unallowable account code.
⚠️ Audit Flags
Large write-offs in the deferred cost accounts; ITAR compliance audit findings.
📄 Required Documentation
Official denial letter from the Department of State (DDTC) or Department of Commerce (BIS).
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Discussion & Community Questions
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