Glossary
Percentage of Completion
Percentage of completion is a revenue recognition method that lets a contractor recognize revenue and profit on a long-term project gradually, in proportion to the work actually completed, rather than waiting until the whole project is finished. It is standard practice in construction and other long-duration contract accounting, and the exact measurement approach depends on the accounting standard the business reports under. Getting it right also depends on disciplined job costing, since the percentage completed is usually measured against costs incurred to date. Our construction and trades accounting page covers how this fits into a contractor's books.
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