Answer
As per IFRS 15, performance obligation is considered to have been fulfilled once control is transferred to the buyer. Indicators of this include:
1. The customer has received/consumed the product or service.
2. The control over the asset has been handed over to the buyer.
3. When the seller has a right to be paid for the product/service.
4. Legal title of ownership has moved from the seller to the buyer and risks, rewards, and obligations that come with it are on the buyer.
Work Step by Step
For example, once you have had a meal in a restaurant, the restaurant can recognize that revenue and you are obligated to pay.
