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hello everyone and welcome to financial accounting today weamp;#39;re going to look at collectibility and how it affects Revenue recognition when we talk about Revenue recognition it is important to keep credit risk in mind credit risk is the risk that the customer will not be able to pay in ance with the contract if the contract exists and itamp;#39;s probable that customer will pay whether a company will get paid is not a consideration in determining Revenue recognition when assessing collectibility a company should determine whether the customer has both the financial capacity and the intention to pay the consideration owed it should consider all relevant facts and circumstances such as the customeramp;#39;s credit risk and credit history as well as current economic condition of the customers industry note that one requirement for recognizing revenue is that collectibility is probable topic 606 of the accounting standards codification often referred to as ASC 606 or fast