Percentage-of Completion Method


Definition of "Percentage-of completion method"

Chris Shortino real estate agent
Chris Shortino, Real Estate Agent eXp Realty

Recognizes profit on a long-term construction contract as it is earned gradually during the construction period. This approach is preferred over the completed contract method because it does a better job of matching revenue and expense in the period of benefit. It should be used when reliable estimates of the degree of completion are possible. It is more realistic and levels out the earnings.

 

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