How to Record FMS Freight Insurance
Recording the cost of cargo insurance for items shipped under a Foreign Military Sales (FMS) contract where the contractor retains risk of loss.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Direct Contract Costs - Insurance | Expense | 3,100.00 | - |
| Accounts Payable | Liability | - | 3,100.00 |
💡 Accountant's Note
Insurance costs directly attributable to an FMS shipment are allowable and should be charged as a direct cost to the specific FMS case/contract rather than through a fringe or G&A pool.
Practitioner & Systems Framework
💻 ERP Architecture
Charge the voucher directly to the project ID associated with the FMS contract.
⚠️ Audit Flags
Double-recovery of insurance if also included in indirect rates.
📄 Required Documentation
Insurance binder, shipping manifest, and FMS contract terms (LOA).
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