Answer
Revenue is one of the most important aspects utilized by investors to analyze an entity's performance. Current environment surrounding revenue recognition seeks to streamline revenue recognition requirements for contractual transactions. With this, companies will be required to identify fulfillment of a contractual obligation to a customer for them to recognize the affiliated revenue.
Work Step by Step
For example, software companies and other intangible assets companies can recognize revenue after transfer of user license to the customer. The transfer stands for the fulfillment of a contractual obligation.
