Contract Assets
[/ˈkɒntrækt ˈæsets/]
nounpl: Contract Assets
Ativos Contratuais
1. Rights to receive consideration in exchange for goods or services transferred to a customer under a contract; recognized as assets on a balance sheet when performance obligations have been satisfied but payment has not yet been received.
The company recorded contract assets for the completed project pending client payment.
A empresa registrou ativos contratuais para o projeto concluído aguardando pagamento do cliente.
2. In accounting, the balance of work performed that exceeds amounts billed to customers, representing future cash flows.
Contract assets increased when the construction firm completed 80% of the project but billed only 60%.
Os ativos contratuais aumentaram quando a construtora completou 80% do projeto mas faturou apenas 60%.
This is technical accounting terminology primarily used in corporate finance, auditing, and financial reporting contexts in both Brazil and Portugal. The term gained prominence following the adoption of IFRS 15 (Revenue from Contracts with Customers) in 2018, replacing previous revenue recognition standards. It is essential for accountants, auditors, and financial analysts working with companies that have performance-based contracts, particularly in construction, software development, and professional services industries.
Related Idioms & Phrases
Recognition of contract assets under IFRS 15
Reclassification from contract assets to receivables upon billing
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