Firms have free choice as to whether to recognize revenue over time or at a point in time to account for a long-term contract.

Question

Quizplus · Accepted Answer

Revenue recognition over time or at a point in time is determined by specific criteria set out in accounting standards (such as IFRS 15 or ASC 606), not by the firm's choice. These criteria are based on the nature of the contract and the transfer of control of goods or services to the customer.

Firms Have Free Choice as to Whether to Recognize Revenue