Revenue Recognition: Guidelines for Estimating Potential for Reversible Revenue for Variable Considerations
This rule outlines how estimating variable consideration affects transaction price. The result of the new way of reporting variable considerations may result in earlier revenue recognition. Variable considerations associated with contract or performance obligations include claims and pending change orders, unpriced change orders, incentive and penalty provisions, shared savings, price concessions, liquidating damages and unit prices.
To help you stay in compliance with revenue recognition standards, save this Construction Issue Sheet.