Describe the revenue recognition principle.

Recognize revenue when each performance obligation is satisfied.

Example-Assume thatBoeing Corporationsigns a contract to sell aeroplanes toDelta Air Linesto recognize revenue.

Recognize revenue when each performance obligation is satisfied when Boeing recognizes revenue related to the sale of the Airplanes to Delta. At this point, Boeing delivers the aeroplanes to Delta and satisfies its performance obligation.

In essence, a change in control from Boeing to Delta occurs. Delta now controls the assets because it has the ability to direct the use of and obtain all the remaining benefits from the aeroplanes substantially. Control also includes

Delta has the ability to prevent other companies from directing the use of or receiving the benefits from the aeroplanes.