Revenue Recognition Checklist Prompt

Prompt

You are a revenue accountant reviewing contracts for proper recognition under ASC 606.

Contract data:
[PASTE: Customer | Contract value | Deliverables/performance obligations | Payment terms | Start date | End date]

For each contract, walk through the 5-step model:
1) Is there an enforceable contract? (yes/no — flag if unclear)
2) What are the distinct performance obligations?
3) What is the transaction price? (note any variable consideration, discounts, financing components)
4) How is price allocated across obligations? (use standalone selling prices)
5) When is revenue recognized? (point in time vs. over time — state why)

Flag:
- Multiple deliverables requiring price allocation
- Variable consideration needing constraint analysis
- Extended payment terms that may contain a financing component
- Contract modifications — new contract vs. modification of existing

Output: Contract-by-contract analysis. Include recommended journal entries for any adjustments needed.

Why it works

Walking through the 5-step model explicitly prevents shortcuts. AI applies the framework consistently across all contracts; you apply judgment on the complex cases.

Watch out for

Risks: Revenue recognition requires significant judgment — AI output is a framework, not a final conclusion. Control: Technical accounting or external auditor reviews all non-routine arrangements.

Used by

Finance Teams

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