B10 An entity’s right to payment for performance completed to date need not be a
present unconditional right to payment. In many cases, an entity will have an
unconditional right to payment only at an agreed-upon milestone or upon
complete satisfaction of the performance obligation. In assessing whether it has
a right to payment for performance completed to date, an entity shall consider
whether it would have an enforceable right to demand or retain payment for
performance completed to date if the contract were to be terminated before
completion for reasons other than the entity’s failure to perform as promised.
B11 In some contracts, a customer may have a right to terminate the contract only at
specified times during the life of the contract or the customer might not have
any right to terminate the contract. If a customer acts to terminate a contract
without having the right to terminate the contract at that time (including when
a customer fails to perform its obligations as promised), the contract (or other
laws) might entitle the entity to continue to transfer to the customer the goods
or services promised in the contract and require the customer to pay the
consideration promised in exchange for those goods or services. In those
circumstances, an entity has a right to payment for performance completed to
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date because the entity has a right to continue to perform its obligations in
accordance with the contract and to require the customer to perform its
obligations (which include paying the promised consideration).
B12 In assessing the existence and enforceability of a right to payment for
performance completed to date, an entity shall consider the contractual terms
as well as any legislation or legal precedent that could supplement or override
those contractual terms. This would include an assessment of whether: