How to Record TINA Defective Pricing Liability
Establish a liability for potential government refunds due to inaccurate or non-current cost or pricing data identified during an audit.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Contract Revenue (Contra-Revenue) | Debit | 150,000.00 | - |
| Accrued Liabilities - Defective Pricing | Credit | - | 150,000.00 |
💡 Accountant's Note
When an audit reveals that the contractor failed to provide accurate, complete, and current cost or pricing data (Truth in Negotiations Act), a liability must be accrued for the estimated price reduction.
Practitioner & Systems Framework
💻 ERP Architecture
Use a specific reason code in the revenue recognition module to track TINA-related adjustments.
⚠️ Audit Flags
DCAA post-award audits and TINA compliance reviews.
📄 Required Documentation
Audit findings, legal counsel assessment, and price impact analysis.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.
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