Under the percentage of completion method, revenue and expenses are recognized in income as the contract activities progress by reference to the stage of completion of a contract.
The costs incurred in reaching the stage of completion are matched with this revenue, resulting in the reporting of revenue, expenses and profit which can be attributed to the proportion of work completed.
Append below are the normal accounting journal entries pertaining to the taking up of revenue and expenses in construction contract accounting using the percentage of completion method:-
|Accounting Entries Using The Percentage of Completion Method
- Construction Contract Question Example To Compute The Percentage Of Completion and Disclosure/Presentation In the Income Statement And Balance Sheet.
- Technical Summary Of IAS 11 Construction Contracts
- Malaysia Financial Reporting Standard (FRS) 111:Construction Contracts
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