How to Record Post-Award Price Reductions
Recording a reduction in contract price following a DCAA finding of defective pricing under TINA.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Contract Revenue | Debit | 50,000.00 | - |
| Accrued Liability - Defective Pricing | Credit | - | 50,000.00 |
💡 Accountant's Note
Under the Truth in Negotiations Act (TINA), if a contractor provided non-current or inaccurate data, the government is entitled to a price reduction. This entry reverses previously recognized revenue.
Practitioner & Systems Framework
💻 ERP Architecture
Create a specific liability account to track TINA settlement obligations separately from general trade payables.
⚠️ Audit Flags
DCAA post-award audit report indicating defective pricing.
📄 Required Documentation
DCAA audit report, contracting officer's final decision, and revised price negotiation memorandum.
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