Misconception · MIS:signed-contract-is-automatically-topic-606

Mistaken idea “A signed agreement is automatically a Topic 606 contract”

Mistaken reasoning: This mistake treats signatures as sufficient and skips scope, enforceability, rights, payment terms, commercial substance, termination, and collectibility.

Updated Aug 21, 2026 Review due Nov 7, 2026

Why this is mistaken

A signature is one fact in a controlled contract analysis. Establish the customer and scope, enforceable rights and obligations, termination terms, payment terms, commercial substance, and collectibility before entering the model. Test contract combination separately.

Where to watch

When this mistake may appear

  • Both parties signed.
  • A legal contract exists.
Check your work

Your work may contain this mistake if:

  • Starts the five steps without testing contract criteria.
  • Ignores an unconditional termination right.
  • Combines agreements because their signatures share a date.