How to Record Unallowable Patent Defense
Recording legal costs associated with defending patent infringement suits, which are generally unallowable under FAR 31.205-30.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Unallowable Legal - Patent Defense | Debit | 25,000.00 | - |
| Accounts Payable | Credit | - | 25,000.00 |
💡 Accountant's Note
Legal costs for patent defense are typically excluded from indirect cost pools and must be coded to an unallowable account to ensure they are not billed to the government.
Practitioner & Systems Framework
💻 ERP Architecture
Map this account to the '999' or 'Unallowable' category in the Indirect Rate calculation module.
⚠️ Audit Flags
Legal invoices mentioning 'infringement' or 'litigation' found in overhead pools during a DCAA audit.
📄 Required Documentation
Detailed legal invoices and a determination memo from the General Counsel regarding the nature of the suit.
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