Build It was contracted to develop integrated equipment for a Navy ship. The integrated equipment will be built on and connected to an existing Navy ship. Below are some of the contract terms:

• If the government cancels the contract, Build It will be entitled to payment for work completed through the date they received notification of cancellation.
• Build It is not to use the design of the equipment in any other contracts due to proprietary information in the equipment.

Which is the appropriate time frame (over time or point in time) and reason for 'Build It Corporation' to recognize revenue for the transaction described?

a. Build It should recognize revenue at a point in time because they do not fulfill the criteria to recognize over time, specifically they do not have an enforceable right to payment.

b. Build It should recognize revenue over time because the contract meets the following criteria:

1. Customer receives/consumes benefit as the entity performs.
2. Entity has enforceable rights to payment.

c. Build It should recognize revenue over time because the contract meets the following criteria:

1. Entity's performance does not create an asset with alternative use to the entity.
2. Entity has enforceable rights to payment.

d. Build It should recognize revenue at a point in time because they do not fulfill the criteria to recognize over time since the entity's performance creates an asset with an alternative use to the entity.