Oil & Gas
Pipeline Ship-or-Pay — Minimum Revenue Recognized
Recognizing minimum ship-or-pay revenue when a shipper fails to use their booked capacity.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash / Receivable (Ship-or-Pay) | Asset (+) | 800,000.00 | - |
| Ship-or-Pay Revenue (Deferred or Earned) | Liability/Revenue (+) | - | 800,000.00 |
💡 Accountant's Note
Ship-or-pay contracts guarantee minimum revenue for pipeline operators. The payment is deferred if the shipper has a make-up right to use capacity later. If no make-up right exists, revenue is recognized immediately.
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