---
id: contract-management
title: Contract Ledger & Customer Hierarchy
sidebar_label: Contract Ledger & Hierarchy
description: Manage multi-tier enterprise customer hierarchies, contract families, master agreements, amendments, and co-terminations in GAAPx.
keywords:
  - contract management SaaS
  - customer hierarchy accounting
  - contract family ledger
  - multi entity contracts
  - parent child revenue
author: GAAPx Engineering Team
last_updated: 2026-10-02
---

# Contract Ledger & Customer Hierarchy

> **Quick Summary:** GAAPx organizes all commercial relationships into an immutable **Contract Ledger**. It models complex multi-tier parent/child customer accounts, multi-entity subsidiaries, and contract families (Master Agreements $\to$ SOWs $\to$ Mid-Term Amendments). When contracts undergo co-terming or early modifications, the ledger preserves historical schedules while automatically generating prospectively adjusted revenue streams.

---

## Contract Family Data Model

Enterprise customer relationships frequently span multiple years, subsidiaries, and successive amendments. GAAPx structures these relationships into a directed tree:

```mermaid
graph TD
    Parent["Parent Corporation (e.g. Acme Global Inc.)"]
    SubUS["Subsidiary: Acme US LLC"]
    SubEMEA["Subsidiary: Acme UK Ltd."]
    
    Parent --> SubUS
    Parent --> SubEMEA
    
    SubUS --> MSA1["MSA #2026-001 (Master Agreement)"]
    MSA1 --> OF1["Order Form #1: Base Platform (2-Year)"]
    MSA1 --> SOW1["SOW #1: Implementation Services"]
    MSA1 --> AMD1["Amendment #1: +50 Seats Co-Termed"]
```

---

## Key Capabilities of the Contract Ledger

### 1. Multi-Entity Subsidiary Routing
Assign distinct contracts to individual legal entities within your corporate holding structure. Each legal entity maintains its own functional currency, chart of accounts mapping, tax registration numbers, and independent accounting period locks.

### 2. Contract Family Lineage
Every amendment, expansion order, and renewal links back to its parent Master Services Agreement. If an amendment modifies the expiration date of an earlier Order Form, GAAPx automatically recalculates amortization periods across all linked performance obligations.

### 3. Co-Terming & Proration Engine
When a customer adds licenses mid-contract, GAAPx calculates the exact elapsed days, applies prorated unit pricing, and generates the delta billing invoice while updating the underlying ASC 606 revenue waterfall in real time.

---

## Contract Status Lifecycle

Contracts progress through rigorous governance states:

| Status | Definition | Accounting Behavior |
| :--- | :--- | :--- |
| **Draft** | Document uploaded, undergoing OCR or manual configuration. | No revenue or billing schedules generated. |
| **Pending Approval** | Awaiting controller or deal desk approval. | Draft waterfall visible for forecasting; no GL sync. |
| **Active (Locked)** | Approved and active. | Real-time daily revenue amortization and live billing. |
| **Amended** | Superseded by an active contract amendment. | Historical periods locked; prospective or catch-up delta applied. |
| **Terminated / Expired** | Contract completed or canceled. | Remaining deferred balances or breakage recognized. |