Parents, what age do you believe it becomes appropriate to use "formal" consequences?

I think each kids hits the age of understanding at a slightly different time, but generally around age 3. Some kids (like my son) can understand way earlier and often need to be given formal consequences at an earlier age. Other kids (my daughter) really don't understand the connection from one thing to the other and need to wait a while before being given the 'because you hit your brother, you are not allowed to watch Scooby Doo tonight'. It all depends. I generally think that the average child is ready around age 3.