If an overall loss is projected on a long-term construction project, when is it recognized under the completed contract method?
A)In the period it occurred
B)In the period it was estimated
C)In the last period of the job
D)In each period the job is in process

Question

Quizplus · Accepted Answer

Under the completed contract method, if an overall loss is projected on a long-term construction project, it is recognized in the period it was estimated. This is because recognizing the loss immediately when it is estimated reflects the economic reality of the project's financial performance and ensures that financial statements provide relevant and timely information.

If an Overall Loss Is Projected on a Long-Term Construction