The completed contract method of accounting recognizes revenue and the associated costs once the project is completed. This is one of the two popular accounting methods used in the construction industry. For residential contractors, the completed contract method has a tax advantage by deferring revenue recognition but is generally not considered the best method of accounting in the construction industry.
A second and easier method of accounting with project accounting (construction) is the completed contract method. This method does not utilize an engineering or detailed production schedule (chart) like the percentage of completion method. It […]