Realization definition
/What is Realization in Accounting?
Realization is the point in time when revenue has been generated. Realization is a key concept in revenue recognition . Realization occurs when a customer gains control over the good or service transferred from a seller.
Realization Indicators
There are numerous indicators of when realization can occur, such as the following:
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When the seller has the right to receive payment.
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When the customer has legal title to the transferred asset .
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When physical possession of the asset has been transferred by the seller.
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When the customer has taken on the significant risks and rewards of ownership related to the asset transferred by the seller.
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When the customer accepts an asset.
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When the customer can prevent other entities from using or obtaining benefits from the asset.
