IFRS 15 sets out three criteria for performance obligations satisfied over time:

1. The customer simultaneously receives and consumes the benefits provided by the entity's performance as the entity performs: This criterion is often met in service contracts where the service is simultaneously received and used by the customer. For example, a cleaning service contract could meet this criterion.
2. The entity's performance creates or enhances an asset (for example, work in progress) that the customer controls as the asset is created or enhanced: This is common in contracts for the construction of assets on a customer's site. The customer controls the asset as it's being created or enhanced.
3. The entity's performance does not create an asset with an alternative use to the entity, and the entity has an enforceable right to payment for performance completed to date: This is typically seen in customized production scenarios where the entity is creating a unique product that cannot be redirected for use by another customer, and the entity has the right to payment for the work done even if the contract is cancelled.

When a performance obligation is satisfied over time, revenue is recognized over time. The entity should measure its progress towards complete satisfaction of the performance obligation in a manner that best depicts the entity's performance in transferring control of the goods or services to the customer. This can be done using either an input method (based on resources consumed, labor hours expended, costs incurred, etc.) or an output method (units produced, contract milestones, surveys of performance completed, et