Question

In government project accounting (like infrastructure projects), revenue recognition may use percentage-of-completion method. Which of the following best describes that method?

Percentage-of-completion recognises revenue proportionate to stage of completion often cost-to-cost.

A Recognise revenue only on completion

B Recognise a fixed proportion of contract value each year regardless of progress

C Recognise revenue based on proportion of costs incurred to date to total estimated costs

D Recognise revenue only if cash received

E Recognise revenue as equal to billings

Detailed Solution