Revenue Recognition: Output Method for Recognizing Revenue Over Time
The output method of revenue recognition measures results as control of goods or services are transferred to the customer, as compared to total estimated outputs needed to complete the contract. This method may be used when the progress of transfer of control can be easily and consistently measured.
Keep in mind that while both the input and output methods are acceptable for measuring transfer of control to the customer, the chosen method must remain in place until the performance obligation is completed.
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