How to Record Unallowable Organization Costs
Accounting for costs related to planning or executing the organization or reorganization of the corporate structure per FAR 31.205-27.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Unallowable Organization Expense | Expense | 15,000.00 | - |
| Accounts Payable | Liability | - | 15,000.00 |
💡 Accountant's Note
FAR 31.205-27 states that expenditures in connection with planning or executing the organization or reorganization of the corporate structure (including M&A activity) are unallowable.
Practitioner & Systems Framework
💻 ERP Architecture
Flag legal and consulting accounts associated with corporate restructuring as unallowable in the cost hierarchy.
⚠️ Audit Flags
Legal and consulting fees during merger or acquisition activity identified in the G&A pool.
📄 Required Documentation
Consultant invoices, legal billings describing the nature of the reorganization work.
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