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Revenues and gross profit are recognized each period based on the construction progress, in other words, the percentage of completion. Construction costs plus gross profit earned to date are accumulated in an asset account (construction in process, also called construction in progress), and progress billings are accumulated in a liability account (billing on construction in process).
The Completed-contract method is an accounting method of work-in-progress evaluation, for recording long-term contracts. GAAP allows another method of revenue recognition for long-term construction contracts, the percentage-of-completion method. With this method, revenue is recognized when the contract is fulfilled.
A Allocation of costs is the transfer of costs from one cost item to one or more other cost items. Allowance - a value in an estimate to cover the cost of known but not yet fully defined work. As-sold estimate - the estimate which matches the agreed items and price for the project scope. B Basis of estimate (BOE) - a document which describes the scope basis, pricing basis, methods ...
There are certain advantages in tax planning when the cash method of accounting is used: for instance, payment of business expenses may be accelerated before year end, in order to maximize tax deductions, whereas billings for services may be postponed to after year end, so that payments won't be received until the new year, thus postponing tax ...
The two came up with a scheme in which Berenyi would pay Vinson either 30% of the net profits on the job or 15% of the gross billings, the indictment alleges. ‘Unlawfully enriching’
Gross billings from Barbie, which include Mattel's cut of the movie box office and various merchandise, will be more than $125 million this year, Mattel chairman and CEO Ynon Kreiz told Yahoo ...
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Gross margin can be expressed as a percentage or in total financial terms. If the latter, it can be reported on a per-unit basis or on a per-period basis for a business. " Margin (on sales) is the difference between selling price and cost.