Retention from Customers

Code: 2141
👁 Views: 85

Account Information

Financial Statement Statement of Financial Position
Normal Balance Credit

Definition

Amounts withheld from customer payments as performance guarantee

Common Journal Entries

Deduct retention from customer billing

Dr. Accounts Receivable
Dr. Retention from Customers
Cr. Contract Revenue

Collect retention after warranty period

Dr. Bank Account
Cr. Retention from Customers

Write off retention due to dispute

Dr. Bad Debt Expense
Cr. Retention from Customers

Transfer retention to regular receivables

Dr. Local Customers
Cr. Retention from Customers

Deduct retention from customer billing

Dr. Accounts Receivable
Dr. Retention from Customers
Cr. Contract Revenue

Collect retention after warranty period

Dr. Bank Account
Cr. Retention from Customers

Write off retention due to dispute

Dr. Bad Debt Expense
Cr. Retention from Customers

Transfer retention to regular receivables

Dr. Local Customers
Cr. Retention from Customers

📐 IFRS vs US GAAP Accounting Treatment

IFRS IFRS 9 Financial Instruments
US GAAP ASC 405 Liabilities

❓ Frequently Asked Questions

Q: What are retentions from customers?

A: Amounts withheld by the customer from the contractor's dues as a performance guarantee, becoming payable after the warranty period.