[MacroUniversity]

Asset recognition requires three criteria:

• The firm owns or controls the right to use the item.
• The right to use the item arises as a result of a past transaction or exchange.
• The future benefit has a relevant measurement attribute that can be quantified with sufficient reliability.

Liability recognition requires two criteria:

• The item represents a present obligation, not a potential future commitment or intent.
• The obligation must exist as a result of a past transaction or exchange.

Revenue recognition requires two criteria:

• Completion of the earnings process: The firm has done all (or almost all) that it has promised to do for the customer. (The firm delivered all or almost all of the goods and services it had agreed to provide.)
• Receipt of assets from the customer: The firm has received cash or some other asset that it can convert to cash, like accounts receivable.