finedu
All experiments
Labs

The two-clock experiment

Cash arrives on day one. Revenue takes its time.

Live experiment

The two-clock experiment

Revenue earned so far300
1202400
324
024

Before you move a sliderAfter three months, how much of a prepaid annual contract has been earned?

Revenue = 1200 × 3 ÷ 12 = 300
Read the mechanism

Moving time changes how much has been earned and how much service is still owed. It never collects the cash a second time. At the end of the term the obligation is zero and every dollar has become revenue.

Model assumptions and units

An evenly delivered service, paid fully in advance, with no refunds or variable pricing. Revenue is capped at the contract term. Real recognition follows the specific performance obligations in the contract.

Learn the thinking behind it