Accounting - 4. Degree of contract completion

4. Degree of contract completion

Where a firm is engaged in large scale construction projects that may take
years to complete, for instance, a large office block, payment may be on a
progressive basis. The revenue will be matched to each accounting period
extending over the life of the project. The main problem with this method
is the subjectivity involved in arriving at an estimate of the degree of
contract completion.

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