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Recognition of Retainage Income - Project Accounting

  • 10 August 2023
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ChrisWeidner
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Hello,

I am noticing that by default if an AR invoice has retainage specified, then this will go directly into Income upon release of the original document. Shouldn’t this be handled differently? I would assume that Retainage Income wouldn’t be recognized until the release of the AR Retainage? Let me know if you have any ideas or can better explain. Thank you! 

 

 

 

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Best answer by Heidi Dempsey 10 August 2023, 21:25

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Heidi Dempsey
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@ChrisWeidner  Retainage can go to a retainage receivable account instead of accounts receivable.   The retainage will not age until it is released.  Then we have many reports to show the total retainage.

ricoybanez
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@ChrisWeidner per your print screen actually its not Recorded as income but instead recorder as Retainage Receivable (Asset Account) the system will record the retention upon Release of Retainage, and will closed your Retainage Receivable.


 

Rico P. Ybanez
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@ChrisWeidner default Acumatica functionality is to credit income for the full value of the invoice to include the AR and RR values. the Retainage income is also recognized as actual income on the project revenue budget. 

We’ve seen issues with this functionality in Canada with IFRS’ take of ASC 606 where income is meant to be shown net of retainage (holdback in Canada) vs US GAAP’s take where income is meant to be shown to include retainage. Acumatica’s project billing system is developed to work with the US GAAP reading of revenue recognition. We’ve handled Canadien entities with auto reversing GL adjustments. 

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