Construction contracts: recognise revenue and costs by stage of completion; recognise expected losses immediately when probable. When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs should be recognised by reference to the stage of completion of the contract activity at the reporting date using the percentage of completion method; if the outcome cannot be estimated reliably, revenue is recognised only to the extent of recoverable costs and no profit is recognised. An expected loss on a contract is recognised as an expense immediately.