How to Record GFM Attrition Costs
Recording the loss or excessive consumption of Government Furnished Material (GFM) that exceeds the contract's allowable scrap rate.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Loss on GFM Attrition (Unallowable) | Debit | 4,500.00 | - |
| GFM Liability/Contra-Asset | Credit | - | 4,500.00 |
💡 Accountant's Note
When GFM is lost or damaged beyond the contractual 'allowable scrap' percentage, the contractor must record the cost of replacement or reimbursement.
Practitioner & Systems Framework
💻 ERP Architecture
Maintain a separate GFM inventory ledger that is reconciled monthly with the general ledger liability account.
⚠️ Audit Flags
High scrap rates reported to DCMA; variance between physical GFM counts and record balances.
📄 Required Documentation
Scrap reports; DD Form 200 (Financial Liability Investigation of Property Loss); DCMA notification.
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Discussion & Community Questions
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