How to Record FMS Administrative Fees
Records the administrative surcharge applied by the US Government for Foreign Military Sales (FMS) cases.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cost of Goods Sold - FMS Admin Fees | Debit | 15,000.00 | - |
| Accrued Liabilities - FMS Surcharge | Credit | - | 15,000.00 |
💡 Accountant's Note
FMS contracts involve a surcharge that the contractor often collects from the foreign customer to pass through to the US Department of Defense to cover program management costs.
Practitioner & Systems Framework
💻 ERP Architecture
Setup as a pass-through cost element to ensure it is excluded from indirect cost base calculations if necessary.
⚠️ Audit Flags
Discrepancies between the surcharge percentage applied and the Letter of Offer and Acceptance (LOA) terms.
📄 Required Documentation
Letter of Offer and Acceptance (LOA) and DFAS billing instructions.
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Discussion & Community Questions
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