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Revenue is recognized when the customer obtains control of a good or service.

ASC 606-10-25-23

An entity shall recognize revenue when (or as) the entity satisfies a performance obligation by transferring a promised good or service (that is, an asset) to a customer. An asset is transferred when (or as) the customer obtains control of that asset.

A performance obligation is satisfied when “control” of the promised good or service is transferred to the customer. This concept of transferring control of a good or service aligns with authoritative guidance on the definition of an asset. The concept of control might appear to apply only to the transfer of a good, but a service also transfers an asset to the customer, even if that asset is consumed immediately.
A customer obtains control of a good or service if it has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. A customer could have the future right to direct the use of the asset and obtain substantially all of the benefits from it (for example, upon making a prepayment for a specified product), but the customer must have actually obtained those rights for control to have transferred.
Directing the use of an asset refers to a customer's right to deploy that asset, allow another reporting entity to deploy it, or restrict another reporting entity from using it. An asset's benefits are the potential cash inflows (or reduced cash outflows) that can be obtained in various ways. Examples include using the asset to produce goods or provide services, selling or exchanging the asset, and using the asset to settle liabilities or reduce expenses. Another example is the ability to pledge the asset (such as land) as collateral for a loan or to hold it for future use.
Management should evaluate transfer of control primarily from the customer's perspective. Considering the transaction from the customer's perspective reduces the risk that revenue is recognized for activities that do not transfer control of a good or service to the customer.
Management also needs to consider whether it has an option or a requirement to repurchase an asset when evaluating whether control has transferred. See further discussion of repurchase arrangements in RR 8.7.
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