Under converged revenue recognition guidance, which statement is accurate?

• A. Revenue recognition is always driven by cash receipt
• B. Revenue recognition timing can vary by industry due to industry-specific differences
• C. Revenues are recognized only at the end of the contractual period
• D. There are no industry differences in timing

Answer: (B)

Under converged revenue recognition guidance, revenue is recognized when control of the goods or services transfers to the customer, not simply when cash is received. This means the timing depends on how and when the performance obligations are satisfied, which can vary across industries due to different business models and contract terms. For example, long-term construction may recognize revenue over time as work progresses, software-as-a-service may recognize revenue over the service period, and other industries may match revenue to milestones or performance outcomes. Because these industry-specific ways of delivering and transferring control drive different timing, the statement that timing can vary by industry is the accurate one. The other options misstate the guidance: revenue isn’t driven solely by cash receipts, it isn’t restricted to the end of a contractual period, and there can be industry differences in timing.