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?
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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.