Under the percentage of completion method,which is used to record profit on assets that take several years to construct,profit is reported as the instalments of contract income that are received.

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Under the percentage of completion method, profit is recognized based on the degree of completion of the project, not on instalments of contract income received. The method considers the total cost incurred so far and the estimated total cost to determine the percentage of completion, which is then used to recognize revenue and profit.

Under the Percentage of Completion Method,which Is Used to Record