Construction
Price Escalation Clause — Revenue Adjustment
Increasing the contract value due to a contractual price escalation clause triggered by rising material or fuel costs.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Accounts Receivable (Escalation) | Asset (+) | 30,000.00 | - |
| Contract Revenue (Escalation) | Revenue (+) | - | 30,000.00 |
💡 Accountant's Note
Many long-term contracts include price adjustment clauses tied to published indices (steel prices, fuel costs). Once the formula is applied and agreed, the additional revenue is recognized.
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