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According to the Realization concept, revenues should only be recognized when:

1) The economic value of the product can be identified.

2) The related revenue (Price) and Cost can be identified.

3) The most critical event has taken place. (This differs from firm to firm but usually once a good has been delivered to it's customer even though he might not have paid for the good, it is considered to be sold and revenue is realized/ recognized)

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