percentage-of-completion method

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Percentage-of-Completion Method

In construction and project finance, a method for calculating profits and losses in which revenue is recognized as it is received, provided that it is prorated according to the percentage of the project that is complete. This differs from the completed-contract method, which only recognizes revenues after the physical completion of the contract. Each method may have its own tax advantages.

percentage-of-completion method

A method of recognizing revenues and costs from a long-term project in relation to the percentage completed during the course of the project. Thus, the percentage-of-completion method allows a business profits (or losses) on a project before its completion. Compare completed-contract method.
References in periodicals archive ?
DMCI restated the financials of its property-development arm as it shifted in accounting policy from completed contract method to percentage of completion method, which was done to align with current accounting practice in the real-estate industry.
The property developer's financial results in the prior year were restated to reflect the shift in accounting policy from completed contract method to percentage of completion method, aligning itself with the current accounting practice in the real estate industry.
Exempt percentage of completion method - general rule he EPCM is a method that only affects how your income is computed and reported on your tax return.
As discussed further below, the general rule for reporting income on long-term contracts is that taxpayers are to use the percentage of completion method of accounting, which requires that income be recognized throughout the duration of the contract.
Based on the percentage of completion method revenue from these new shipbuilding contracts will be known over the respective contract period in accordance with the Group's revenue recognition policy .
Vista Land uses the percentage of completion method of revenue recognition where revenue is recognized in reference to the stages of development of the properties.
This company uses the percentage of completion method as it is required by some of the government agencies for which Environmental Services has the construction contacts.
The additional time required for delivery will mean that the revenue recognition of milestones, which are a fixed amount, under the percentage of completion method, will now be extended over a further 12 months.
C is not required to use the percentage of completion method for regular tax purposes, but it calculates its E&P using that method (Sec.
Until 2008, Emaar had adopted the percentage of completion method of revenue recognition for its developments as it results in better reflection of operational results and level of development carried out by a real estate company on a periodical basis.
While the percentage of completion method is generally the standard for financial reporting purposes in the construction industry, there are a number of different methods available for income tax purposes depending upon a company's size and the type of work performed.
Certain construction trades must use the percentage of completion method.

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