How to Record GFM In-Transit Loss
Recording the liability and loss associated with Government Furnished Material (GFM) damaged or lost during transit when the contractor bears risk of loss.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Loss on Government Property | Expense | 4,500.00 | - |
| Liability for Government Property | Liability | - | 4,500.00 |
💡 Accountant's Note
Under FAR 52.245-1, if the contractor is responsible for GFM in transit and loss occurs, the contractor must recognize the liability to the government and the corresponding non-reimbursable loss.
Practitioner & Systems Framework
💻 ERP Architecture
Ensure the property management system is updated to reflect the loss and linked to the financial entry.
⚠️ Audit Flags
Discrepancies between shipping manifests and receiving reports (DD Form 1149).
📄 Required Documentation
Incident report, shipping documents, and formal notification to the Government Property Administrator.
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Discussion & Community Questions
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