Which method of revenue recognition is required for long-term contracts when the outcome can be measured reliably under both IFRS and US GAAP?
Answer
percentage-of-completion
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Open it Because of better matching with the periods in which work is performed, the percentage-of-completion method is the preferred method of revenue recognition for long-term contracts and is required when the outcome can be measured reliably under both IFRS and US GAAP.
Original toplevel document
3.2.1. Long-Term Contracts imates and is thus not as objective as the completed contract method. However, an advantage of the percentage-of-completion method is that it results in better matching of revenue recognition with the accounting period in which it was earned. <span>Because of better matching with the periods in which work is performed, the percentage-of-completion method is the preferred method of revenue recognition for long-term contracts and is required when the outcome can be measured reliably under both IFRS and US GAAP. Under both IFRS and US GAAP, if a loss is expected on the contract, the loss is reported immediately, not upon completion of the contract, regardless of the method used (e.g., percentag
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