If the percentage-of-completion method is used and an interim loss is incurred on a long-term contract, it is necessary to recognize that loss in full.

Question

Quizplus · Accepted Answer

The percentage-of-completion method requires that any interim losses on a long-term contract be recognized in full immediately, as it reflects the current financial position and performance of the contract.

If the Percentage-Of-Completion Method Is Used and an Interim Loss