Under ASPE, the profession requires that the percentage-of-completion method be used when certain conditions exist. Which of the following is NOT one of those necessary conditions?
A) Estimates of progress toward completion, revenues, and costs are reasonably dependable.
B) The contractor can be expected to perform the contractual obligation.
C) The buyer can be expected to satisfy some of the obligations under the contract.
D) The contract clearly specifies the enforceable rights of the parties, the consideration to be exchanged, and the manner and terms of settlement.

Question

Quizplus · Accepted Answer

The condition mentioned in option C is not necessary for the use of the percentage-of-completion method under ASPE. The necessary conditions, as stated in ASPE 3400, are that the estimates of progress toward completion, revenues, and costs are reasonably dependable; the contractor can be expected to perform the contractual obligation; and the contract clearly specifies the enforceable rights of the parties, the consideration to be exchanged, and the manner and terms of settlement.

Under ASPE, the Profession Requires That the Percentage-Of-Completion Method Be