Revenues are recognized in the accounting period in which the performance obligation is satisfied.

Question

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This is the basic principle of revenue recognition under generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS). The satisfaction of a performance obligation occurs when the goods or services are transferred to the customer and the customer obtains control over them. This can occur at a point in time or over a period of time, depending on the nature of the transaction. The revenue is recognized at the amount expected to be received in exchange for the transfer of goods or services.

Revenues Are Recognized in the Accounting Period in Which the Performance