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What do the completed contract method of accounting for long term contract use for?
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When comparing the percentage of completion and completed contract method of accounting for long term construction contract both methods will report the same?
yes they will
What factors influence choosing percentage of completion and completed contract method methods of accounting for long term construction contract?
prepere all necessary and materials etc.
Long-term contractors are permitted to use the percentage of completion method for the purpose of revenue recognition and income determination. Consider why this method is not used by other companies?
This method is used for long-term projects when there is a contract, and reliable estimates of production completed, revenues and costs are possible.
What is the Difference between short and long term contract?
A short term contract is any contract that is started and completed within a fiscal year. A long-term contract is any contract that is started in a fiscal year and is completed in another fiscal year. For instance. If the taxpayer has a December 31 year end and a contract is started on December 24th and completed on January 3rd, this is deemed a long-term contract even though the duration of the contract was only 10 days.
Are the percentage of completion and completed contract method methods of accounting for long term construction contract reporting the same amount of income in the year of completion?
At the end of the contract the same amount will have been recognized under both methods for the entire period of the contract. However, the final year of the contract will not usually be the same under both methods. In other words, if a contract spans 2 years, the percentage completion will pick up part of the income in year one and part in year 2. The combined total picked up in both years under percentage completion will be the amount reported under completed contract in year 2 (nothing will be picked up in year 1).
In terms of a contract what does the sla refer to?
The sla in a contract generally refers to a part of the agreement that states how long things will be expected to take such as the time it will generally take to get repairs completed.
Long-term contractors are permitted to use the percentage of completion method for the purpose of revenue recognition and income determination why this method is not used by other companies?
It may depend on what the companies are accounting for...Such as Real estate they use The Installment Sales Method. Which under this method the profit is recognized as cash is collected rather than a the time of sale. Such as accounting for Installment Sales of Merchandise... they use this based on the uncertainty of cash collection. It all is determined and considered with input and output measures...Input measures-- are made relations to the cost or efforts devoted to a contract. this based on an established or assumed relationship between a unit of input and productivity. Output measures--are determined by the the results acheived. these are methods based on units produced, contract milestones reached, and values added. So all companies may account for something different under the circumstances...Such as also Proportional Performance Method reflects revenues earned on services contracts under which many acts of services are to be performed before the contract id complete. Such as contracts covering maintainence on office equipment, trustee services, lawyers and law services, even accounting services.
What is Percentage of completion method in construction company?
An accounting method used for long-term construction contracts that recognizes revenues and related expenses before they occur based on an input or output measure of the earning process.
What is the accounting definition of capitalized?
The accounting definition of capitalized is a method used to delay the recognition of expenses by recording the expense as long-term assets. Basically you write off the cost of what you're currently doing or purchasing and instead think of the long term capital you will gain from the product or service.
How long before your notified your done paying child support in Montana?
You may have to file with the court once you realize you have completed the contract for paying child support.
What is gaap?
Generally Accepted Accounting Principles Generally Accepted Accounting Principles (GAAP) is the standard framework of guidelines for financial accounting. It includes the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements. One key aspect of GAAP is an emphasis of "general" as a conceptual realization of variables in method. Far from suggesting that all accounting exercises employ the same method and generate the same results, GAAP accommodates variation in applied accounting methods as long as the methods generally adhere to this set of principles, which are more broad than specific. Pursuant to the foregoing, not only therefore does this provide for variation in method, the natural conclusion is GAAP creates an environment in which financial reporting results can vary depending on purpose. One company in one fiscal year can produce different reports, all completed within GAAP, for different audiences or different purposes, and all these reports can be considered correct.
What is the statute of limitations in Florida on written contracts and when does it begin?
Conrtact law states that contracts are binding for as long as the contract is good for. Breach of contract is punishable in varying degrees depending on the contract clauses. There is no statute of limitation on contract laws and the contract takes effect as soon as you sign or agree via a provable method.
