Final answer:
The new ASU on revenue recognition replaced the terms "completed contract method" and "percentage-of-completion method" with two new terms: revenue recognition over time and revenue recognition at a specific point in time. The correct options are a and b.
Step-by-step explanation:
The new ASU on revenue recognition replaced the terms "completed contract method" and "percentage-of-completion method" with two new terms: revenue recognition over time and revenue recognition at a specific point in time. These terms refer to different methods of recognizing revenue for a contract.
Revenue recognition over time is used when the customer receives the benefits of the seller's work as it is being performed. This method is appropriate when the seller's performance creates or enhances an asset that the customer controls as it is being created.
On the other hand, revenue recognition at a specific point in time is used when the seller's performance creates an asset that is not controlled by the customer until it is complete. This method is appropriate when the seller's performance creates an asset or work-in-progress that has more value to the customer as it nears completion. Hence, Options a and b are correct.