USA Deferred asset balance - Contractual service agreement

[People123]

Hi community,

I'm working on CSA (Contractual service agreements): as the multi year maintenance contracts are underwritten, a deferred asset builds on the balance sheet. The issue is that some contracts are currently troubled. It's an industrial company.

1. What's the accounting literature describing if impairment/reserve provisions need to be booked to reduce the deferred asset exposure? FAS 114? FAS 5?

2. Do you have any examples or model used by the Big 4 or by quoted companies to approach this problem?

Thanks in advance!!
Rob.

 

[Counterofbeans]

Please describe the cash flows involved with these contracts