How to Record FAA Type Certification Costs
Accounting for the capitalization of costs incurred to obtain FAA type certification for dual-use aircraft variants.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Intangible Assets - Certification Costs | Debit | 850,000.00 | - |
| Accrued Engineering Labor | Credit | - | 550,000.00 |
| Accounts Payable - Testing Services | Credit | - | 300,000.00 |
💡 Accountant's Note
Costs for obtaining certification are often capitalized as intangible assets and amortized over the production life of the aircraft variant under GAAP and FAR cost principles.
Practitioner & Systems Framework
💻 ERP Architecture
Project-based accounting to capture all internal and external certification costs before transfer to fixed asset module.
⚠️ Audit Flags
Review of capitalization policy and the useful life assigned for amortization.
📄 Required Documentation
FAA application, testing logs, and certification award documentation.
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