---
title: Bill-and-Hold Arrangement
description: A contract where an entity bills a customer for a product but retains physical possession of the product until a later date. Revenue can only be recog...
sidebar_position: 34
tags: ['asc-606', 'Billing']
---

# Bill-and-Hold Arrangement

## The ASC 606 Standard

A contract where an entity bills a customer for a product but retains physical possession of the product until a later date. Revenue can only be recognized if very strict criteria regarding control and segregation are met.

## The Real-World Scenario

A client buys 1,000 laptops for a future office expansion but asks you to store them in your warehouse for six months.

## The Spreadsheet Breaking Point

Manually verifying that all strict regulatory criteria are met before recognizing revenue on unshipped goods is a massive audit trap.

## The Hidden Cost to the Bottom Line

Recognizing revenue on inventory still sitting in your warehouse without absolute proof of criteria fulfillment guarantees a forced restatement.

## How GAAPX Eliminates the Risk

Enforces a strict, system-gated compliance checklist before allowing any revenue to be recognized on unshipped inventory.