Deloitte
Accounting Research Tool
...
Chapter 8 — Step 5: Determine When to Recognize Revenue

8.3 Two Models for Revenue Recognition — Based on Control

8.3 Two Models for Revenue Recognition — Based on Control

At contract inception, an entity must determine whether the performance obligation meets the criteria for revenue to be recognized over time (see Sections 8.4 and 8.5); if the performance obligation does not meet those criteria, revenue must be recognized at a point in time (see Section 8.6). That is, the entity must carefully evaluate how and when control is transferred to the customer. While generally speaking, goods are transferred at a point in time and services are transferred over time, this is not the case in all circumstances.

Footnotes

1
Quoted from Q&A 54 of the FASB staff’s Revenue Recognition Implementation Q&As (the “Implementation Q&As”).