Contract Asset

The ASC 606 Standard

An entity's right to consideration in exchange for goods or services transferred, conditioned on something other than the passage of time. It reflects earned value that is not yet legally billable.

The Real-World Scenario

You finish Phase 1 of an implementation and earn the revenue, but the contract explicitly states you cannot invoice the client until Phase 2 is complete.

The Spreadsheet Breaking Point

Tracking conditional milestones across different operational teams to know exactly when to move an asset to an invoicable receivable requires constant manual follow-up.

The Hidden Cost to the Bottom Line

Losing track of contract assets traps earned revenue in unbillable states, severely restricting the company's working capital.

How GAAPX Eliminates the Risk

Automatically tracks operational milestones and reclassifies the asset to an unconditional receivable the exact moment conditions are met.