Revenue recognition for contracts requires percentage-of-completion accounting with short-term and indeterminate-contract exceptions and retention rules. Revenue recognition for construction and service contracts requires determination of profits and gains using the percentage of completion method under notified income computation and disclosure standards. For service contracts, profits and gains are determined by the project completion method for short-duration contracts and by the straight line method for contracts involving an indeterminate number of acts over a specified period. For all prescribed methods, contract revenue includes retention money and contract costs are not to be reduced by incidental income such as interest, dividends or capital gains.