Understanding Revenue Recognition Under GAAP

Under the Generally Accepted Accounting Principles (GAAP) framework, revenue recognition is a crucial concept that determines when and how revenue is reported in financial statements. In 2014, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) issued a new revenue recognition standard aimed at simplifying the process and creating a more consistent approach across industries.

Which of the following statements best describes the core principle of the revenue recognition framework introduced by the new GAAP and IFRS standard?