Given that the three criteria for revenue recognition seem very straight forward, how is it possible for companies in the same industry to recognize revenue at different times?
Although the criteria seem straight forward this does not mean that every company will recognize revenue at the same time. Each company must trace the flow of goods or services through its organization and must decide at which point in that progress, most of the revenue amount has been earned. These decisions require the use of judgement. Accounting is not black and white. Because companies make these judgement calls, it is important that they tell users (through notes to the financial statements) what revenue recognition policy they are following. Only with this knowledge can you make reasonable comparisons between companies.
