Question:
What indicators suggest that a performance obligation has been satisfied with respect to a good
(merchandise)?
Answer:
Under the proposed ASU, a performance obligation for a good is satisfied when control of the good is
transferred to the buyer. Four key indicators that control of a good has passed from the seller to the buyer
are:
1. Buyer has an unconditional obligation to pay.
2. Buyer has legal title.
3. Buyer has physical possession.
4. Buyer has the risks and rewards of ownership.
What indicators suggest that a performance obligation has been satisfied with respect to a good
(merchandise)?
Answer:
Under the proposed ASU, a performance obligation for a good is satisfied when control of the good is
transferred to the buyer. Four key indicators that control of a good has passed from the seller to the buyer
are:
1. Buyer has an unconditional obligation to pay.
2. Buyer has legal title.
3. Buyer has physical possession.
4. Buyer has the risks and rewards of ownership.
