When should revenue be recognized according to standard accounting practices?

Revenue should be recognized when value has been delivered to customers, which aligns with the core principles of revenue recognition under generally accepted accounting principles (GAAP) and the International Financial Reporting Standards (IFRS). This principle ensures that revenue is recorded in the financial statements when it has been earned, rather than when payment is received or other unrelated events occur.

Delivering value to customers signifies that the seller has fulfilled their obligations in the transaction, effectively transferring control of goods or services. This reflects the economic reality of the transaction and provides users of financial statements with a more accurate picture of a company's performance.

Other options, such as recognizing revenue at the time of cash collection, would misstate revenue if a sale occurred on credit. Recognizing revenue solely based on the incurrence of related expenses fails to establish a clear connection between revenue earned and the costs associated with generating that revenue. Finally, promoting a sale does not constitute the completion of a transaction; thus, revenue should not be recognized until delivery of value has occurred.