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The main problem with this method is the subjectivity involved in arriving at an estimate of the degree of contract completion.
The degree of contract completion comes to play its role where firms engage themselves in large scale construction project which takes years to complete.
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.
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.
Revenue varies depend on the type of business engaging.
I always wondered if the funds were paid upfront, becuase I have seen construction contractors begin a project and complete., so where does it leave everyone., especially when the project is almost done., not counting material
What is a degree of contract completion?
OK
Is it good to estimate high or or to estimate exactly on such kind of contract???
I agree with you