Conditions for recognizing revenue by time period: If one of the following conditions is met, the performance obligation is fulfilled within a certain period of time; otherwise, the performance obligation is fulfilled at a certain point in time:
1 , The customer obtains and consumes the economic benefits brought by the company's performance while the company performs the contract.
2. Customers can control the goods under construction during the company's performance of the contract.
3. The goods produced by the enterprise during the performance of the contract have irreplaceable uses, and the enterprise has the right to collect payment for the cumulative performance part completed so far during the entire contract period.
Irreplaceable use means that due to contractual restrictions or practical feasibility restrictions, the company cannot easily use the goods for other purposes. The right to collect payment for the cumulative performance part that has been completed so far means that when the contract is terminated due to reasons of the customer or other parties, the enterprise has the right to collect payment for the cumulative performance part that has been completed so far that can compensate for the costs incurred and reasonable profits. payment and that right is legally binding.
Conditions for recognizing revenue at a certain point in time: For performance obligations performed at a certain point in time, the enterprise shall recognize revenue at the point when the customer obtains control of the relevant goods. When judging whether a customer has obtained control of a product, the company should consider the following signs:
1. The company has a current right to receive payment for the product, that is, the customer has a current payment obligation for the product.
2. The enterprise has transferred the legal ownership of the product to the customer, that is, the customer already has the legal ownership of the product.
3. The enterprise has physically transferred the commodity to the customer, that is, the customer has physically taken possession of the commodity.
4. The enterprise has transferred the main risks and rewards of ownership of the commodity to the customer, that is, the customer has obtained the main risks and rewards of ownership of the commodity.
5. The customer has accepted the product.
6. Other signs indicating that the customer has obtained control of the product.