02 — Capability · BC-250.50
Revenue Recognition
Recognize revenue when the enterprise has delivered what it promised, in the amount it is entitled to, under the accounting standard that applies, even when the invoice says something different.
- Revenue Accounting
- Contract Accounting
In scope
- Contract review and performance obligation identification
- Allocation and timing of revenue
- Deferred and unbilled revenue
- Revenue reporting and controls
Out of scope
- Drafting the customer contract (see BC-150)
- Sales commission accounting (see BC-350)
Realized by · 0
- No product in the catalog yet.
Used in · 1
Build it · 0
- Nothing in the library points here yet.
Decomposes into · 4
- BC-250.50.10Contract & Obligation ReviewRead each customer contract for the distinct promises it contains and the price attached to each, including the ones buried in side letters.
- BC-250.50.20Revenue Allocation & TimingAllocate the contract price across obligations and recognize each portion when it is satisfied, whether at a point in time or over a period.
- BC-250.50.30Deferred & Unbilled RevenueTrack the gap between what has been billed and what has been earned in both directions, and reconcile the balances each period.
- BC-250.50.40Revenue Reporting & ControlsReport revenue by the dimensions leadership needs and operate the controls that stop it being recognized early, late or twice.