How to Record REA Submission
Recording a Request for Equitable Adjustment (REA) when recovery is probable and the amount can be reasonably estimated.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Claims Receivable | Asset | 12,000.00 | - |
| Contract Revenue | Revenue | - | 12,000.00 |
💡 Accountant's Note
Under ASC 606, if the contractor has an enforceable right to payment for change orders, revenue is recognized to the extent recovery is probable.
Practitioner & Systems Framework
💻 ERP Architecture
Use a specific revenue category for 'Claims' to distinguish from base contract funding.
⚠️ Audit Flags
Lack of Contracting Officer (CO) acknowledgement or history of REA denials.
📄 Required Documentation
Legal opinion on claim validity and detailed cost impact analysis.
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Discussion & Community Questions
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