An attacker is fouled, but the referee immediately (not waiting for 2-3 seconds to elapse) sees a clear opportunity for the attacking team to benefit from continuing play and calls out “play on” with the appropriate hand signal. Within 2-3 seconds an attacker (but not the attacker initially fouled) fouls a defender. The referee blows his whistle to stop play and calls the original foul for the attacker and has the ball brought back to the point of the original foul for a free kick to the attacking team; rather than a foul by the attacking team and a free kick for the defending team.

The question came up that calling “play on” is an immediate “calling the foul” and “instantaneous restart”. Therefore, the referee had made a decision and could no longer decide to call the original foul. Had the referee waited a bit longer before signaling “play on”, he could then appropriately call the original foul.

In other words, once the referee calls “play on” can the original foul still be penalized or has the opportunity “gone away” because the referee has indicated his decision? If the “play on” negates calling the original foul, when the referee blew his whistle to stop play the appropriate restart would have been a free kick to the defending team.

USSF answer (November 16, 2010):
It is rarely a mistake for the referee to wait that 2-3 seconds to ensure that the advantage has been realized before announcing the decision to “play on.” By so doing, the referee can generally avoid awkward situations like the one you present.

Our recommendation in this specific situation is to forget the first foul and call the one that occurred after the advantage was announced, but to be prepared to handle any misconduct which may have attached to the first foul.

Signaling “Play on!” does not now nor has it ever “negated” the foul. That’s what the 2-3 seconds are for – to see if the proto-advantage we (in our wisdom and experience) saw as enough of a possibility that we were not prepared to blow the whistle immediately actually reaches some fruition. The theory, of course, is that the speed of soccer play (at the sort of competitive level where we would look to apply advantage) needs only 2-3 seconds to either resolve itself or not.

Over the years, two distinctly different approaches to operationally implementing “advantage” have developed.

Approach A – signal advantage as soon as the foul occurs in the presence of an advantage POSSIBILITY, and then come back to stop play for the original foul if, after 2-3 seconds, the advantage was neither realized nor maintained.

Approach B – observe the foul, decide if there is an advantage possibility, observe play for the next several seconds and then either comeback to the original foul if the advantage was neither realized nor maintained OR signal the advantage if it was.

Either is acceptable, both have pluses and minuses to their use (all of which are discussed in several position papers (on the US Soccer website). See also Advice to Referees 5.6.