Why this is mistaken
A supported settlement discount reduces the transaction price. When performance is complete, revenue and the related receivable begin at that same supported amount. Collection settles the receivable and does not create another revenue or expense event. If the estimate changes before collection, update the price at the reporting date under the variable-consideration guidance and keep any credit-loss analysis separate.
Where to watch
When this mistake may appear
- Record the full invoice now and discount expense when paid.
- Cash collection determines the final revenue date.
- An expired discount cannot affect revenue before payment.
Check your work
Your work may contain this mistake if:
- Separates revenue from the same supported price used for the receivable or waits for cash to update completed performance.