if a reporting entity has a customary business practice of not enforcing right to payment clausesn its contracts, is there enforceable right to payment?
A reporting entity's customary business practice of not enforcing right to payment clauses in its contracts does not automatically mean it lacks an enforceable right to payment. According to the principles outlined in ASC 606, the existence of a contractual right to payment is a key factor in recognizing revenue. If the contract indeed grants the entity the legal right to receive payment, this right is considered enforceable, regardless of the entity's usual practice. However, the entity's practice might impact the assessment of collectability and could influence the timing of revenue recognition. It's essential to consider all relevant facts and circumstances in determining whether the right to payment is enforceable under the contract.
