USA Work in Progress and Retention


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We are currently using only NET sales on our WIP reports because we cannot bill for retention until job completion. We also recognize the unbilled retentions as earned rev. on the balance sheet. However, my dilemma is that if we use the NET sales amount on the WIP and recognize the under-billed as earned rev. as well, isn't that double-dipping?
 
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Triest123

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We are currently using only NET sales on our WIP reports because we cannot bill for retention until job completion. We also recognize the unbilled retentions as earned rev. on the balance sheet. However, my dilemma is that if we use the NET sales amount on the WIP and recognize the under-billed as earned rev. as well, isn't that double-dipping?
=> Retention is the difference between the Billing Amount (i.e. Invoice amount) &
the actual cash receipts from the customers.
It should be treated as current asset (i.e. account receivable) on the balance sheet
if the cash receipts is less than the billing amount. or treated as current liability
if the cash receipts is more than the billing amount.

I don't know what is "earned rev. on the balance sheet"?
 

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