How to Record FAR 31 Restructuring Costs
Accounting for restructuring costs which, under FAR 31.205-52, are only allowable if they result in a net reduced cost to the government.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Deferred Restructuring Costs (Asset) | Asset | 250,000.00 | - |
| Accrued Restructuring Liabilities | Liability | - | 250,000.00 |
💡 Accountant's Note
Restructuring costs are often deferred and amortized over a period not exceeding five years. To be allowable, the contractor must demonstrate that the restructuring will result in savings that exceed the costs.
Practitioner & Systems Framework
💻 ERP Architecture
Create a specific project or cost center to track all restructuring-related activities separately from operational G&A.
⚠️ Audit Flags
Amortization schedule mismatch with the restructuring agreement signed by the ACO.
📄 Required Documentation
Restructuring proposal, cost-benefit analysis, and written approval from the Administrative Contracting Officer (ACO).
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Discussion & Community Questions
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