Under a contract with multiple performance obligations, revenue is recognized:

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Multiple Choice

Under a contract with multiple performance obligations, revenue is recognized:

Explanation:
When a contract has multiple promises, revenue is recognized based on when control transfers for each individual promise. You don’t recognize all revenue at once, at contract signing, or only when cash is collected. Instead, each performance obligation is satisfied at the point in time (or over time) that the customer gains control of the promised good or service. To apply this, you identify each distinct obligation, allocate the transaction price to them, and then recognize revenue for each obligation as control transfers. This can mean some obligations are satisfied at a point in time (e.g., delivery of a product) and others over a period (e.g., ongoing services). So revenue is recognized at whatever time is appropriate for each performance obligation, not simply at a single date or upon collection.

When a contract has multiple promises, revenue is recognized based on when control transfers for each individual promise. You don’t recognize all revenue at once, at contract signing, or only when cash is collected. Instead, each performance obligation is satisfied at the point in time (or over time) that the customer gains control of the promised good or service.

To apply this, you identify each distinct obligation, allocate the transaction price to them, and then recognize revenue for each obligation as control transfers. This can mean some obligations are satisfied at a point in time (e.g., delivery of a product) and others over a period (e.g., ongoing services).

So revenue is recognized at whatever time is appropriate for each performance obligation, not simply at a single date or upon collection.

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