Professional Services
Performance Bonus — Variable Fee Earned
Recognizing a performance bonus when the client confirms the firm exceeded agreed KPI targets.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Accounts Receivable (Performance Bonus) | Asset (+) | 15,000.00 | - |
| Variable Fee Revenue (Bonus) | Revenue (+) | - | 15,000.00 |
💡 Accountant's Note
Variable consideration (performance bonuses, KPI uplifts) is recognized only when it is highly probable the amount will not be significantly reversed. Formal client confirmation that KPIs were met lifts the revenue constraint.
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