Which statement best describes the asset recognition criterion?

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Asset recognition hinges on whether an item will bring future economic benefits to the entity and whether its cost or value can be measured reliably. You record an asset when it is probable that future benefits will flow to the entity and the asset’s cost or value can be measured reliably. This means recognition can occur before cash changes hands or before you physically possess a tangible asset, as long as you control the right and can quantify its value. For example, a receivable from a sale on credit represents a probable inflow of future cash and can be measured reliably, so it is recognized as an asset. In contrast, simply receiving cash, or requiring a high market value threshold, or recognizing only upon physical acquisition, do not by themselves satisfy the recognition criteria. The key idea is that the item must be expected to bring economic benefits and be measurable in monetary terms.