How to Record UCA Interim Profit
Recognition of estimated profit on work performed under an Undefinitized Contract Action (UCA) prior to final price agreement, subject to FAR profit limitations.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Unbilled Receivables | Asset | 85,000.00 | - |
| Contract Revenue | Revenue | - | 85,000.00 |
💡 Accountant's Note
UCA interim profit is recorded to match revenue with progress achieved. FAR 15.404-4 limits the profit objective on UCAs before definitization to reflect the lower risk assumed by the contractor during the undefinitized period.
Practitioner & Systems Framework
💻 ERP Architecture
Set up a temporary profit rate in the project accounting module specifically for the UCA funding task.
⚠️ Audit Flags
Changes in profit rates upon definitization; exceeding the profit ceiling established in the UCA clause.
📄 Required Documentation
UCA award document, profit objective calculation, and evidence of cost performance.
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Discussion & Community Questions
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