STEP 5. RECOGNISE REVENUE WHEN PERFORMANCE OBLIGTION IS SATISFIES

Question 1

When is revenue recognised?

Answer 1

Revenue is recognised as/when an entity satisfies each performance obligation.

Question 2

Whec satisfaction of each performance obligation occurs?

Answer 2

Satisfaction occurs as/when the entity transfers ‘control’ of the goods or services to the customer

Question 3

When is allowed to recognise revenue over time?

Answer 3

Recognise revenue over time if one of the following apply:
- Customer simultaneously receives and consumes the benefits as the entity performs (not good contracts);
- The asset that is created or enhanced is controlled by the customer;
- The vendor does not have an alternative use for the asset that it creates or enhances and has an enforceable right to payment for performance completed to date.