How to Record FPIF Ceiling Overrun
Recognizing costs incurred in excess of the ceiling price on a Fixed-Price Incentive (Firm Target) contract.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Loss on Contract (Unallowable/Non-Reimbursable) | Debit | 75,000.00 | - |
| Contract WIP - Inventory | Credit | - | 75,000.00 |
💡 Accountant's Note
On FPIF contracts, any costs incurred above the ceiling price are the sole responsibility of the contractor and must be recorded as a loss and excluded from indirect rate pools.
Practitioner & Systems Framework
💻 ERP Architecture
Configure a 'Hard Ceiling' flag in the contract management module to stop billing but allow cost accumulation for reporting.
⚠️ Audit Flags
Comparison of cumulative actual costs vs. contract ceiling price in the SEC filings or DCAA ICS.
📄 Required Documentation
Contract award document showing ceiling price and share ratio; monthly EAC (Estimate at Completion) reports.
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Discussion & Community Questions
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