How to Record GFM Property Insurance
Accounting for insurance premiums specifically related to protecting Government Furnished Material (GFM) held in the contractor's custody.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Overhead - Insurance Pool | Debit | 1,200.00 | - |
| Prepaid Insurance | Credit | - | 1,200.00 |
💡 Accountant's Note
While the government often self-insures, contractors may be required to carry specific insurance for GFM under certain contract types. These premiums are allocated through the indirect cost pools.
Practitioner & Systems Framework
💻 ERP Architecture
Amortize prepaid insurance monthly to the specific overhead pool identified in the Disclosure Statement.
⚠️ Audit Flags
FAR 31.205-19 compliance check to ensure insurance costs are not redundant with government-assumed risks.
📄 Required Documentation
Insurance policy endorsement specifying GFM coverage and premium breakdown.
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