Accounting › Section H · Accounting for receivables › Topic H.5
Revenue recognition on long-term projects
A bridge, a ship or a custom software system can take years to deliver. If the builder waited until handover to report any revenue, its income statements would show long droughts and sudden floods. ASC 606 instead lets most such projects earn revenue as the work progresses.
In this topic
- The problem with waiting
- When revenue is recognised over time
- Measuring progress
- Worked example: cost-to-cost
- Worked example: a revised estimate
- Loss contracts and uncertain estimates
- Billing, contract assets and contract liabilities
- Older methods you may still meet
- Common mistakes to avoid
- Key takeaways
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