How to Record STE Fabrication Costs
Accounting for the internal build of Special Test Equipment (STE) used solely for a specific government program.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Special Test Equipment - Contract Specific Asset | Debit | 45,000.00 | - |
| Direct Manufacturing Labor (WIP) | Credit | - | 30,000.00 |
| Raw Material Inventory | Credit | - | 15,000.00 |
💡 Accountant's Note
Costs to fabricate STE are capitalized as contract-specific assets and usually amortized or directly charged to the contract upon completion, provided they have no alternative use.
Practitioner & Systems Framework
💻 ERP Architecture
Set up a capital project code for STE fabrication to capture labor and materials separately from production.
⚠️ Audit Flags
Verification of 'no alternative use' requirement under FAR 45; review of STE vs general purpose equipment.
📄 Required Documentation
Engineering justification for STE status and proof of contract requirement for specific testing.
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Discussion & Community Questions
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