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Performance obligations
Performance obligations
Performance obligations are promises to transfer goods or services to a customer.
When are performance obligations satisfied?
When are performance obligations satisfied?
Performance obligations are satisfied when the seller transfers control of goods or services to the customer.
Control is when the customer has direct influence over the transferred good or services and receives their benefits.
There does not need to be a signed agreement.
Some sales only have one performance obligation
Some sales only have one performance obligation
Example, Pat's sells a customer a steak.
Other sales have multiple performance obligations
Other sales have multiple performance obligations
Example: A company sells computer software and support services are included in the price.
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