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Performance obligation satisfied over time

The criteria include the customer simultaneously receiving and consuming benefits, the customer controlling the asset as it is created or enhanced, or an asset with no alternative use plus an enforceable right to payment for performance completed to date. Select an appropriate input or output method to measure progress and apply it consistently. If none of the criteria is met, assess the point at which control transfers instead.

Worked example

A cleaning service is performed evenly across a year and the customer simultaneously receives and consumes the benefits. For a $12,000 contract, $3,000 revenue is recognised after three months, assuming progress and other conditions support straight-line recognition.

Common mistake

Recognising revenue over time simply because a contract lasts longer than one accounting period, without assessing the criteria.

Where it appears in your exams

QualificationExamRelationshipPeriod
ACCA FR Direct September 2026–June 2027
ACCA SBR Direct September 2026–June 2027