Generally, revenue is recognized when it is probable that an entity will receive the economic benefits associated with the revenue and the amount of revenue can be reliably measured.

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Revenue recognition principles, as outlined in accounting standards like IFRS 15 and ASC 606, state that revenue is recognized when it is probable that the economic benefits will flow to the entity and the revenue amount can be measured reliably. This ensures that revenue is recorded in the period in which the goods or services are transferred to the customer, reflecting the actual earnings and financial position of the entity.

Generally, Revenue Is Recognized When It Is Probable That an Entity