percentage-of-completion method

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
Mentioned in ?
References in periodicals archive ?
* Not account for long-term construction contracts using the percentage-of-completion method (PCM) of accounting (Sec.
Relief for small business tax accounting methods: An increase in the gross receipts ceiling is a welcome development for many enterprises
In addition, taxpayers that meet the $25 million threshold are exempted from using the percentage-of-completion method for small construction contracts entered into after Dec.
Keeping Your Balance: Tax reform key changes to consider in connection with year-end tax planning
The company determined that it should have applied the percentage-of-completion method of accounting under the FASB's Accounting Standards Codification No.
AZZ Inc. to restate three 10-K forms, 2 10-Q forms after accounting error
Under the old law, if your company had more than $10 million in revenue, you were required to file your return using the percentage-of-completion method for construction, installation and manufacturing contracts.
What Should Trade Creditors Know About the New Tax Law?
The big change, in a nutshell, is a move away from a strict percentage-of-completion method to recognizing revenue under a new revenue recognition model.
Contractors braced for new accounting rules for revenue recognition
Large contractors are required to account for long-term contracts using the percentage-of-completion method, also known as PCM, for their general-construction contracts.
Keeping your balance: Construction accounting tax tips
Taxpayers with long-term contracts must use the percentage-of-completion method under Sec.
Considering cash: advantages and availability of the cash method of accounting
At present, revenues from the industry's sales of condominium units are recognized under the percentage-of-completion method. Under this method, provided certain criteria are met, the gross income from the presale of condominium units is recognized based on the stage of completion.
IFRS 15
GAAP requires the percentage-of-completion method unless reliable estimates cannot be made.
Revenue recognition: how we got here and where it will take us
Revenues from fixed-price contracts are recognised using the percentage-of-completion method (they are calculated as the proportion of the cost of effort incurred up to the reporting date to the estimated cost of total effort).
Mid-cap IT stocks score over large peers right now
The company also stated that it will now submit a plan of compliance no later than 14 May 2012 explaining that the complexities and complications of the restatement recognising revenue using the percentage-of-completion method rather than multiple deliverable elements resulted in its inability to file within the 5-day extension period that ended 14 February 2012.
Orion Energy announces receipt of non compliance notice from NYSE Amex
That is a misconception, however; the percentage-of-completion method of accounting will not face extinction if the proposal becomes a final standard.
Convergence collaboration: revising revenue recognition

Financial browser ?
Full browser ?