What is the significance of 'acceptance criteria' in Agile?

The significance of 'acceptance criteria' in Agile is primarily to specify user acceptance of a deliverable. Acceptance criteria outline the conditions that a product or feature must satisfy to be accepted by the stakeholders, which typically includes users and product owners. These criteria provide a clear framework for both the development team and stakeholders on what constitutes a successful implementation.

By defining specific conditions for acceptance, it helps in ensuring that the end product meets the necessary requirements and expectations of users. This aids in driving the development process, as it focuses the team on delivering functional features that fulfill these criteria. It also serves as a basis for testing, as testers can use the acceptance criteria to verify whether the delivered solution meets the agreed-upon requirements.

In contrast to other options, milestones relate to broader project timelines and deliverables, performance benchmarks focus on how well the application performs, and documentation standards pertain more to the practices of writing and maintaining documents rather than user acceptance. Therefore, acceptance criteria play a crucial role in the Agile methodology by aligning development output with user needs and expectations.