Revenue and costs from construction contracts are to be recognized by reference to the stage of completion of contract activity on the reporting date. This is referred to as “percentage of completion” method. Under this method, revenue, expenses and profit are reported based on the proportion of work completed.
Percentage of completion method recognizes construction contract revenue, expenses and profit by proportion of work completed.
Recognition of revenue and expenses for construction contracts under ICDS III is governed by the percentage of completion method, whereby revenue, costs and profit are recognized by reference to the stage of completion of contract activity on the reporting date and reported in proportion to work completed.
Note: It is a system-generated summary and is for quick reference only.
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