Computation of contract income: percentage of completion mandated, short-duration services use project completion and indeterminate services use straight line. Profits and gains from construction and service contracts must be determined using the percentage of completion method under applicable income computation and disclosure standards; short-duration service contracts use the project completion method and contracts involving an indeterminate number of acts use the straight line method. Contract revenue includes retention money, and contract costs cannot be reduced by incidental income such as interest, dividends or capital gains.
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Computation of contract income: percentage of completion mandated, short-duration services use project completion and indeterminate services use straight line.
Profits and gains from construction and service contracts must be determined using the percentage of completion method under applicable income computation and disclosure standards; short-duration service contracts use the project completion method and contracts involving an indeterminate number of acts use the straight line method. Contract revenue includes retention money, and contract costs cannot be reduced by incidental income such as interest, dividends or capital gains.
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