If it becomes apparent that a long term project will result in a loss, the full amount of the loss must be accounted for in the year it is first estimable.

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This statement is true according to generally accepted accounting principles (GAAP). When it is determined that a long-term project will result in a loss, the full amount of the loss should be recognized in the financial statements for the period in which the loss is first estimable. This is known as the doctrine of conservatism, which means that losses should be recognized as soon as they are probable, while gains should only be recognized when they are certain.

If It Becomes Apparent That a Long Term Project Will