Answer: $4.4 million

## Explanation Under revenue recognition principles (particularly IFRS 15/ASC 606): 1. **Software license component ($3.6 million)**: This is recognized immediately at the beginning of the contract since it represents a one-time transfer of intellectual property rights. 2. **Support service component ($2.4 million)**: This is recognized over the contract period of 3 years using the straight-line method: - Annual revenue = $2.4 million ÷ 3 years = $0.8 million per year 3. **Total revenue for the most recent year**: - License revenue: $3.6 million (recognized immediately) - Support revenue: $0.8 million (first year's allocation) - **Total = $4.4 million** Therefore, the most appropriate revenue recognition is $4.4 million, representing the immediate recognition of the license component plus the first year's allocation of the support services.

Author: LeetQuiz Editorial Team