Revenue Recognition: Uninstalled Materials
Uninstalled materials generally are defined as standard materials that are easily transferable to other jobs and those which are custom ordered for projects. ASC 606 guidance on this topic is secondary to other GAAP guidance.
Consequently, contractors must first determine whether the uninstalled materials are classified as inventory. If they are, then they are recorded as inventory. Materials that are not considered inventory under the cost-for-cost input method.
To help you stay in compliance with revenue recognition standards, save this Construction Issue Sheet.