CPA · Question 23 · Area II: Technical Accounting
Construct Corp. enters into a contract to build a specialized satellite for a government customer. The contract price is $10 million. The satellite has no alternative use to Construct Corp., and the contract provides an enforceable right to payment for performance completed to date. How should revenue be recognized under ASC 606?
Answer options:
Over time, because the asset has no alternative use and the entity has a right to payment.
Point in time, when the satellite is delivered and accepted.
Point in time, when the contract is signed.
Over time, only if the customer controls the asset as it is created.
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