A contract exists for purposes of revenue recognition if either the seller or customer has performed an obligation specified by the contract.

Question

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According to ASC 606 (Revenue from Contracts with Customers), a contract exists if it has commercial substance, is enforceable, and both parties have approved the contract. Additionally, revenue can only be recognized if there is an identified performance obligation in the contract, and either the seller or customer has fulfilled that obligation. Therefore, a contract exists for revenue recognition purposes if either party has performed an obligation as specified in the contract.

A Contract Exists for Purposes of Revenue Recognition If Either