According to UK GAAP under FRS 102, when is revenue recognized?

Revenue recognition under UK GAAP as outlined in FRS 102 focuses on when the significant risks and rewards of ownership are transferred to the buyer. This principle is essential because it captures the essence of the transaction: the seller has fulfilled its obligations to the customer, and the customer now bears the risks associated with ownership, such as the risk of loss or damage to the goods. As a result, revenue is recognized in the financial statements at the point when this transfer occurs, rather than simply when the sale is completed, delivery happens, or cash is received.

The emphasis on the transfer of risks and rewards ensures that revenue recognition accurately reflects when the earnings process is complete. This approach aligns with the accrual accounting concept, which recognizes income when it is earned, irrespective of the timing of cash flows. Thus, revenue is recognized at the point of transfer, signaling that it is no longer under the control of the seller.