Claude Skill

revenue-recognition

Determines when and how revenue is recognized — performance obligations, contract terms that change the answer, and the deal structures that create accounting problems. Use this to work out how a contract should be recognized, review a non-standard deal before it is signed, under

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Part of cbrock84/headcount — 160 skills

Install

skills CLI npx skills add https://github.com/cbrock84/headcount/tree/main/plugins/finance/skills/revenue-recognition

Claude Code claude plugin marketplace add https://llmmart.ai/marketplace.json && claude plugin install cbrock84-headcount@llmmart

Git git clone https://github.com/cbrock84/headcount.git

The skills CLI installs just this skill, for any of its supported agents. Claude Code installs the whole cbrock84/headcount collection as a plugin from our marketplace. Git is the plain clone.

Skill manifest

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.

Terms that change the answer

These belong in a pre-signature review, because after signature the only remedy is an amendment the customer has no reason to agree to:

Acceptance clauses — a customer right to reject can defer recognition until acceptance.
Termination for convenience — a short-notice exit can shorten the contract term for accounting purposes, however long the stated term is.
Contingent or milestone fees — variable consideration, constrained until it is probable there will be no significant reversal.
Material rights — a renewal or upgrade priced below standalone value can itself be a performance obligation carved out of today's price.
Extended payment terms — payment far from delivery can introduce a financing component.
Side letters. Any promise made outside the contract is still part of the contract. They are the single most common cause of restatement, and by construction finance does not know they exist.

Working with sales

Recognition treatment is a deal input, not a post-signature discovery. A concession that costs nothing commercially can move revenue across a period boundary, and by the time finance sees the signed paper the trade has already been made.

Give revenue:chief-revenue-officer and revenue:pricing-and-packaging a small set of standard structures that recognize cleanly, and route anything outside them through review before signature — alongside legal-risk:contract-review, which owns the legal exposure the same clauses create.

Deferred revenue is an obligation

The deferred balance is work owed, not money banked. Track it by cohort and obligation so you can answer what it is composed of and when it releases. A balance nobody can decompose is one that surprises you.

Sources

references/sources.md in this skill lists the outside authorities that settle the questions here — what each one is authoritative for, and what you may do with it. Check them before answering on anything they cover, and cite what you used. Most are free to read and not free to reproduce; the use note on each is binding.

Tooling

Subledgers that carry recognition schedules: NetSuite Advanced Revenue Management, Zuora Revenue, Maxio, Chargebee, Stripe Revenue Recognition, and similar.

Spreadsheet schedules hold up until contracts carry multiple performance obligations or take mid-term modifications. That is the point to move, not a revenue threshold.

Never

Recognize on invoice date or cash receipt as a shortcut.
Allocate price across obligations the way the quote happened to be laid out.
Let a side letter exist.
Conclude a material or novel contract's treatment without your auditors.

Files (headcount)

references

sources.md 1.2 KB

# Sources — `finance:revenue-recognition`

<!-- Generated by scripts/build-sources.py from sources/*.toml. Do not edit. -->

Check these before answering on anything they cover, and cite what you used. The use note on each one is binding: most of what a professional cites is free to read and not free to reproduce.

## FASB Accounting Standards Codification

Financial Accounting Standards Board · US · **account required — cite it; the user fetches it**

<https://asc.fasb.org/>

**Authoritative for:** US GAAP as it actually reads — revenue recognition, leases, impairment. The Basic View is free with an account and the text is copyrighted: cite the ASC number, do not reproduce the wording.

## IFRS Accounting Standards

IFRS Foundation · global · **account required — cite it; the user fetches it**

<https://www.ifrs.org/issued-standards/list-of-standards/>

**Authoritative for:** The standards outside US GAAP, and where the two diverge on a given transaction. Free access requires an account; the text is copyrighted.

---

Sources are maintained in `sources/` upstream, not here. If one is wrong, out of date, or missing, fix it there — this file is regenerated and an edit to it is lost.

SKILL.md 4.1 KB

---
name: revenue-recognition
description: Determines when and how revenue is recognized — performance obligations, contract terms that change the answer, and the deal structures that create accounting problems. Use this to work out how a contract should be recognized, review a non-standard deal before it is signed, understand deferred revenue, or spot terms that would delay or reverse recognition.
---

# 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.

## Terms that change the answer

These belong in a pre-signature review, because after signature the only remedy is an amendment the
customer has no reason to agree to:

- **Acceptance clauses** — a customer right to reject can defer recognition until acceptance.
- **Termination for convenience** — a short-notice exit can shorten the contract term for accounting
  purposes, however long the stated term is.
- **Contingent or milestone fees** — variable consideration, constrained until it is probable there
  will be no significant reversal.
- **Material rights** — a renewal or upgrade priced below standalone value can itself be a
  performance obligation carved out of today's price.
- **Extended payment terms** — payment far from delivery can introduce a financing component.
- **Side letters.** Any promise made outside the contract is still part of the contract. They are the
  single most common cause of restatement, and by construction finance does not know they exist.

## Working with sales

Recognition treatment is a deal input, not a post-signature discovery. A concession that costs
nothing commercially can move revenue across a period boundary, and by the time finance sees the
signed paper the trade has already been made.

Give `revenue:chief-revenue-officer` and `revenue:pricing-and-packaging` a small set of standard
structures that recognize cleanly, and route anything outside them through review before signature —
alongside `legal-risk:contract-review`, which owns the legal exposure the same clauses create.

## Deferred revenue is an obligation

The deferred balance is work owed, not money banked. Track it by cohort and obligation so you can
answer what it is composed of and when it releases. A balance nobody can decompose is one that
surprises you.

## Sources

`references/sources.md` in this skill lists the outside authorities that settle the questions
here — what each one is authoritative for, and what you may do with it. Check them before
answering on anything they cover, and cite what you used. Most are free to read and not free
to reproduce; the use note on each is binding.

## Tooling

Subledgers that carry recognition schedules: NetSuite Advanced Revenue Management, Zuora
Revenue, Maxio, Chargebee, Stripe Revenue Recognition, and similar.

Spreadsheet schedules hold up until contracts carry multiple performance obligations or
take mid-term modifications. That is the point to move, not a revenue threshold.

## Never

- Recognize on invoice date or cash receipt as a shortcut.
- Allocate price across obligations the way the quote happened to be laid out.
- Let a side letter exist.
- Conclude a material or novel contract's treatment without your auditors.