Contract Liability Account

The Contract Liability account represents an entity's liability to transfer goods and services to customers against which either party has performed.

The account tracks an initial accrual to complete the transfer of the goods or services to the customer at their revenue values

The Contract Liability account is:

• Credited when previously unaccrued performance obligations are accrued after either party initially performs.
• Debited by the obligation settlement when goods and services are transferred to customers and the goods and services are satisfactorily recognized as revenue.

All transactions in the Contract Liability account are valued at revenue values.