Share this content

Accrued income - IT or energy contracts

Looking for guidance on the correct accounting treatment on this

Didn't find your answer?

Whose up for this helping me on this one? 
If a client provides IT services and sells that service on a 3 year fixed contract , should all of that value be recognised?
Would it be correct   that the double entry would be DR accrued income (BS) and CR sales (PL)
Then when the monthly invoices are created they CR the accrual account?

Replies (2)

Please login or register to join the discussion.

avatar
By Anonymous.
03rd Nov 2020 15:56

I vote probably not but would depend on the details of the contract anyway.

Thanks (0)
paddle steamer
By DJKL
03rd Nov 2020 16:00

How do revenues and costs marry up through the contract period, are there front end costs etc?

Notwithstanding I doubt I would recognise the contact in full upon inception but would more likely recognise through the contract term.

Thanks (0)
Share this content