Hi Team,
This is a question about accounting treatments to be performed when there is difference between recognized revenue and billed( invoiced) value
Let’s take project with estimated revenue of 100,000 and already customer has been billed for 30,000. Yet when you run the revenue recognition, you get a value of 45,000 (Assume manual POC), now what is the next action business supposed to perform?
Are we supposed to perform WIP accounting for 15,000 ? what happens if there none invoiced, invoiceable transactions worth 15,000?
Any guidance is appreciated.
Question
What are the next steps after revenue recognition
Hello,
normally, no further action is needed.
Calculated recognized revenue, is presented in Profit and loss statement (net result of reversing previous and calculating current recognition) and your actual/billed revenue is capitalized and difference between actual and recognized revenue presented in Balance sheet.
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