Consistency is a key requirement of networked multiplayer computer games. Several methods exist that strive to reduce network traffic in an attempt to maintain an acceptable level of consistency. Currently, these methods update an entity's states based on measures of its spatial and temporal inconsistencies. However, these measures do not, in general, consider inconsistencies associated with the entity's interactions with other environmental objects, which can potentially lead to significance differences in what users see and experience. This is particularly evident in physics-aware, peer-to-peer distributed interactive applications such as networked multiplayer computer games. Thus, this paper proposes a novel entity state update technique for such applications. In doing so, the concept of a physics-consistencycost is introduced. The proposed technique consists of a dynamic authority scheme for shared objects and an enhanced physics-aware dead reckoning model with an adaptive error threshold. The former places a bound on the overall inconsistency present in shared objects, while the latter minimises the instantaneous inconsistency during users' interactions with shared objects. The performance of the proposed entity state update mechanism is validated through simulation, the results of which are presented and discussed within.