Which condition is NOT a criterion for satisfying performance obligations over time?

The correct answer highlights an important aspect of revenue recognition under IFRS 15. To recognize revenue over time instead of at a point in time, specific criteria must be met.

One of the criteria states that the performance obligation must either create or enhance an asset that the customer controls as it is completed. This aligns with the idea that revenue can be recognized as the customer benefits from the asset being constructed or developed. Therefore, the criteria that the performance creates an asset with alternative use to the entity does not qualify under the conditions that legally permit revenue to be recognized over time.

The reasoning lies in the concept of "alternative use." If an asset has alternative uses, it might mean that the entity could use that asset for different customers or projects, which generally indicates the performance obligation may not lead to the customer benefiting from the work continuously. In contrast, the other conditions emphasize ongoing benefit to the customer and a direct link between progress and control over the asset being created or enhanced.

Consequently, the aspect of whether the performance obligation results in an asset with an alternative use is crucial, as it does not align with the main objectives of recognizing revenue over time. This ensures that revenue is only recognized when it reflects the transfer of control and benefits being rendered