Jev on ASC 606 contract termsResearch note, October 2026

One sentence in this 120-page contract could change how revenue is recognized.

Finding that sentence takes a trained revenue specialist, and most finance teams have too few of them to read every deal.

Test runjev-1.13.0180 calls$0.0076 total

§ 4.3Additional Tokensp. 47 of 120

At any time during the Subscription Term, Customer may purchase additional input tokens, in blocks of 1 trillion, at $21 per billion input tokens.

Revenue impact: material right

Customers this size pay at least $38 per billion, so a 45% discount on future purchases is a separate right, and part of the $960,000 fee must be deferred.

02Where Jev fits

Testing Jev on flagging revenue recognition issues

  1. § 4.3Additional Tokens

    “…Customer may purchase additional input tokens, in blocks of 1 trillion, at $21 per billion input tokens.”

    Label material right

    Jevtrigger0.61

    needs revenue review?

    flag

  2. § 6.2Service Credits

    “…under the SLA that remain unused at the end of the Term will be paid to Customer in cash within thirty (30) days.”

    Label variable consideration, refund

    Jevtrigger0.82

    needs revenue review?

    flag

  3. § 9.1Early Renewal

    “Effective 1 March 2027, this Order Form terminates and replaces the Prior Order. …”

    Label contract modification

    Jevtrigger0.83

    needs revenue review?

    flag

  4. § 11.4Payment

    “The license fee is payable in eighteen (18) equal monthly installments of $50,000, the first due on the delivery date.”

    Label financing component

    Jevtrigger0.61

    needs revenue review?

    flag

03The general question

With the rule written out and the facts computed, Jev made the right review call on all 20 test clauses.

93%Rule written out

100%Facts also computed

Example: the 18-installment payment clause. The license is delivered at signing and paid over 18 months. If payment trails delivery by more than a year, part of the $900,000 may be interest, so less revenue is recognized at delivery.

I asked Jev: “Under clause, does more than one year separate when the customer receives the service and when it pays, in either direction?” Correct answer: yes.

§ 11.4Paymentp. 104 of 120

The license fee is payable in eighteen (18) equal monthly installments of $50,000, the first due on the delivery date.

Computed in code: 17 months between delivery and the last payment

  • Reading the clause alone: Jev said 0.25 (no)
  • With “17 months” computed in code: Jev said 0.72 (yes)

When Jev was unsure, with an answer between 0.5 and 0.7, it was right only about half the time (48% of 29 answers). Those are the calls to send to a person.

04The technical question

Naming the specific ASC 606 issue is harder: on material rights, Jev reaches 85–95% even with the rule written out.

Two more questions Jev missed when asked by name: financing and contract modification.

Payment Terms

Invoices are payable within ninety (90) days of the invoice date.

fact sentcomputed.longest_gap_between_service_and_payment: "about 9 months"asked"…raise the question of a significant financing component?"Jev0.74 → yescorrect: no

ASC 606 lets a vendor skip the financing assessment when payment arrives within a year of delivery (606-10-32-18), and every payment here does.

Supplemental Order

This Supplemental Order is a new and independent agreement and does not modify the Prior Order. Customer purchases an additional 300B tokens for use during the remaining 6 months of the Prior Order at $1.40 per 1M tokens ($420,000).

fact sentcomputed.added_tokens_price_vs_ssp: "30% below the low end of the SSP range"asked"…is `clause` a contract modification?"Jev0.33 → nocorrect: yes

It fails the separate-contract test (606-10-25-12) because its price is 30% below the normal range, so it's accounted for as a change to the old contract.

05What’s left

Most of the remaining misses come from how Jev reads a clause’s structure.

These errors persist with the rule written out and the facts computed, so better questions won’t fix them.

Supplemental Order

…Customer purchases an additional 300B tokens for use during the remaining 6 months of the Prior Order at $1.40 per 1M tokens ($420,000).

fact sentcomputed.added_tokens_price_vs_ssp: "30% below the low end of the SSP range"fact sentdeal.prior_order.add_on_option: "none"asked"Does `clause` give the customer an option to buy additional goods or services at a price below the standalone selling price stated in the deal information?"Jev0.88 → yescorrect: no

The price is 30% below normal, but the customer has committed to buy, so there is no option.

Amendment

Effective 1 July 2026, the price for the remaining 6 months of the Prior Order is reduced to $1.80 per 1M tokens; the resulting $100,000 reduction is credited against Customer's next invoice. …

fact sentcomputed.reduced_price_vs_ssp: "10% below the low end of the SSP range"asked"Does `clause` make the amount the customer pays depend on a future event, such as service credits, refunds, a performance guarantee, or a penalty?"Jev0.62 → yescorrect: no

The new price and the $100,000 credit are both fixed amounts; nothing depends on usage or performance.

The report lists the misses that came from my own question wording.

06Training data

Where training data could help

Code can already measure how large a discount is. Recognizing whether a clause grants an option or commits to a purchase is a reading judgment, which pairs like this one could teach.

One training pair keeps the clause the same and changes the phrase that decides the answer.

§ 3.2Year-Three Tokens

Customer purchases 300B additional tokens for use in the third contract year at $1.50 per 1M tokens.

Correct answer: no material right, because the customer has already committed to the purchase.

§ 3.2Year-Three Tokens

Customer may purchase up to 300B additional tokens for use in the third contract year at $1.50 per 1M tokens.

Correct answer: material right, because it is an option at a discount below the normal price range.

This pair targets the first error above, where Jev read a committed purchase as an option.

I built 12 examples in 6 pairs like this, each labelled from its facts. For close calls, such as a price just under the normal range, the label should be the share of reviewers who would say yes rather than a plain yes or no. See the training examples