Which factor determines whether revenue for a construction project is recognized over time rather than at a point in time under IFRS 15/ASC 606?

• A. The asset is completed and delivered to the customer.
• B. The customer controls the asset as it is being created and has enforceable rights.
• C. Revenue is recognized only when cash is collected.
• D. Revenue is recognized at contract inception.

Answer: (B)

Revenue is recognized over time when the customer controls the asset as it is being created. Under IFRS 15/ASC 606, if the customer has control over the asset as it is being constructed and there is an enforceable right to payment for performance to date, revenue can be recognized progressively rather than only when the asset is completed and transferred. This mirrors construction projects where the customer benefits from ongoing work and can direct the process as it progresses.

The other options describe scenarios that typically lead to point-in-time recognition or non-IFRS-15 methods: finishing and delivering the asset triggers revenue at the moment control passes; recognizing revenue only on cash collection uses cash-basis timing; recognizing revenue at contract inception ignores ongoing progress and performance to date.