How to Record GFM Obsolescence Write-off
Records the write-off of Government Furnished Material (GFM) that has become obsolete or unusable, following DCMA notification and approval.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Loss on Inventory Disposal (Non-Reimbursable) | Debit | 12,500.00 | - |
| Government Furnished Material Inventory | Credit | - | 12,500.00 |
💡 Accountant's Note
When GFM is declared obsolete, the value is removed from the tracking account. If the contractor is liable for the loss under the contract terms, a loss is recognized.
Practitioner & Systems Framework
💻 ERP Architecture
Use the Property Management module to flag items for disposal before processing the financial write-off.
⚠️ Audit Flags
Discrepancies between the physical GFM audit and the GFM property record system.
📄 Required Documentation
DCMA Form 1427 (Plant Clearance Automated Reutilization Screening System) or equivalent approval.
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