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Contract Asset and Contract Liability Rollforward (ASC 606)

Does it tie out, and if not, where is the difference?

Opening contract balances plus revenue less billings to the closing contract asset or liability, with the disclosure figures.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Closing net contract position
-$120,000
Asset if positive, liability if negative
Closing contract asset
$0
Closing contract liability
$120,000
Drawn to one scale
Closing net contract position-$120,000
Closing contract asset$0
Closing contract liability$120,000
Revenue from opening contract liability (disclose)$210,000
All results
MeasureResult
Closing net contract position
Positive: contract asset. Negative: contract liability
-$120,000
Closing contract asset$0
Closing contract liability$120,000
Revenue from opening contract liability (disclose)$210,000
Share of opening liability recognized84.00%
How this was worked out
Work shownrecomputed as you type
Closing net = opening asset - opening liability + revenue - billings
Contract asset if positive; contract liability if negative

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Closing net = opening asset - opening liability + revenue - billings
  • Contract asset if positive; contract liability if negative

How it works

A contract asset is a right to consideration conditional on something other than the passage of time; a contract liability is consideration received or due before the entity performs. Each contract is presented as a single net asset or liability, so roll forward at contract level and sum the assets and liabilities separately.

ASC 606-10-50-8 requires disclosure of opening and closing balances and revenue recognized in the period that was included in the opening contract liability.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

Is a billed receivable a contract asset?

No. Once the right is unconditional except for time, it is a receivable.

Can I net contracts with different customers?

No. Netting is within a single contract (or contracts combined under ASC 606-10-25-9).

Why might this not tie to the ledger?

Netting across contracts in the tool hides gross assets and liabilities. Run it per contract when both exist.

Sources

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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