When should revenue be recognized for special assessments after project completion?

The correct answer emphasizes that revenue from special assessments should be recognized once it becomes available following project completion. This approach aligns with the accrual basis of accounting, which dictates that revenues should be recognized when they are both measurable and available to finance expenditures in the current period.

In this context, "available" means that the collected funds from the special assessments can be used to meet current liabilities, thereby affecting the fiscal health of the entity. Recognizing revenue only once the special assessments are available ensures that financial statements reflect the actual resources that can be deployed for expenditures, providing a more accurate picture of the organization’s financial situation.

This method also upholds the revenue recognition principle, which aims to match revenue with the expenses incurred to generate that revenue, thereby promoting transparency and accountability in financial reporting. The timing of the recognition is crucial, as it prevents overstating revenue before the assessments can be collected and used, which could mislead stakeholders regarding the entity's financial position.