Backlog Analysis

Definition

The valuation of a company's existing order book or contracted but undelivered revenue at the measurement date. Backlog is recognised as a contract-based intangible asset under IFRS 3 and ASC 805 when it arises from contractual or legal rights. The income approach is most commonly used, discounting the expected profit from backlog fulfilment over the estimated delivery period, with adjustments for attrition risk and contributory asset charges.