Revenue Recognition: Assessing Multiple Performance Obligations
This rule outlines the specific point in time when distinct performance obligations are deemed to be satisfied in a contract with multiple performance obligations.
When a contract contains multiple performance obligations, revenue must be recognized in an amount equal to the fair value of each of the separate performance obligations. The transaction price is only allocated to goods and services that are both distinct and separately identifiable.
To help you stay in compliance with revenue recognition standards, save this Construction Issue Sheet.