Chapter 18, Problem 30Q

To determine

Contract assets: It is an entity’s right to payment for product and services which are already transferred to the customer only if the right to payment is conditional on something other than the passage of time.

Contract liabilities: An entity’s obligation to transfer the product or services to the customer earlier than when the consideration is prepaid by the customer or the time that the customer’s consideration is due for products or services will be provided by the entity.

To determine the conditions when contract assets and liabilities are recognized and presented in financial statements.