Final answer:
A company recognizes revenue over a period of time when performance obligations are satisfied over that specific period as outlined in ASC 606. It applies to situations like ongoing services or constructions where the customer gets benefits concurrently with the company's work, or the work creates an asset that the customer can control.
Step-by-step explanation:
A company recognizes revenue over a period of time when it satisfies a performance obligation in a contract with a customer over that specified period, rather than at a single point in time. The conditions for recognizing revenue over time under the revenue recognition standard (ASC 606) can include situations where the customer simultaneously receives and consumes the benefits provided by the entity's performance as the entity performs, where the entity's performance creates or enhances an asset that the customer controls, or where the asset created does not have an alternative use to the entity and there is an enforceable right to payment for performance completed to date.
For instance, construction contracts, service agreements, and subscription-based services often result in revenue being recognized over time as the services are performed or as control of a product is transferred incrementally.