Under the contract based approach, a company can recognize revenue when it has transferred a promised good or service to a customer.

Question

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Under the contract-based approach, as outlined in accounting standards like IFRS 15 and ASC 606, a company recognizes revenue when it satisfies a performance obligation by transferring a promised good or service to a customer, at an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services.

Under the Contract Based Approach, a Company Can Recognize Revenue