If the collection is not deemed probable, how do you account for the sale?
Collectibility not assured
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If the collection is not deemed probable, how do you account for the sale?
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If collection is not deemed probable, then step 1 of the model is not met, and you do not have a contract under ASC 606. As such, you would not recognize any accounts receivable, revenue, contract assets or contract liabilities. If collectibility is later deemed to be probable, you would start recognizing the contract under ASC 606 and do a cumulative catch-up adjustment.