Under the provisions of FASB ASC 606 A company has satisfied its performance obligation when the
A) The company has transferred physical possession of the asset
B) The company has received payment for goods or services
C) The company has significant risks and rewards of ownership
D) The company has legal title to the asset

Question

Quizplus · Accepted Answer

According to FASB ASC 606, a company has satisfied its performance obligation when it has transferred physical possession of the asset to the customer, which means that choice A is the correct answer. Receipt of payment or legal title to the asset do not necessarily indicate that the performance obligation has been satisfied, and significant risks and rewards of ownership is only one factor to consider in determining when performance has been satisfied.

Under the Provisions of FASB ASC 606 a Company Has