Revenue recognition

Cash received is not revenue earned. The gap between them is where deals get restructured after signature and where quarters get restated.

This structures the question and tells you what to ask. Revenue recognition is a technical accounting matter under standards such as ASC 606 and IFRS 15 — conclusions on a material or unusual contract need your auditors or a qualified accountant, not a checklist.

The shape of the question

Recognition follows the transfer of control to the customer, worked through in five steps: identify the contract, identify the distinct performance obligations, determine the transaction price, allocate it across the obligations, then recognize as each is satisfied.

Most disputes happen at step two and step four. What sales sold as one thing is frequently several obligations for accounting purposes — software plus implementation plus support — and the price has to be allocated across them on standalone selling price, not on how the quote was written.