Section 3...Revenue Recognition

Question 1

Completed-contracts method

Answer 1

No rev, expenses, or Gross Profit is recognized until the contract is complete.

Question 2

Performance obligations

Answer 2

If the buyer CAN perform the task (like installation and testing), then the seller DOES separate out this performance in recognizing revenue.

If the buyer CANNOT perform the task, then the seller DOES NOT separate out this performance in recognizing revenue.