A technology company, TechMark, licenses its patented software algorithm to DataWorks for use in its data management systems. TechMark is to receive a usage-based royalty of 3% on DataWorks's quarterly revenue generated through the use of the software algorithm. The license grants DataWorks access from the beginning of the year, and the initial implementation services provided by TechMark are completed by this date. According to U.S. GAAP, when should TechMark recognize the royalty revenue?
O Recognize revenue evenly over the four quarters of the year, independent of DataWorks's actual revenue.
O Recognize revenue as a lump sum at the beginning of the year when access to the algorithm is granted.
O Defer the recognition of revenue until DataWorks's annual revenue is reported.
O Recognize revenue quarterly as DataWorks generates revenue through the use of the software algorithm.