Engineering & Construction Accounting: The application of revenue recognition models in the engineering and construction industry

March 2012
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Engineering & Construction Accounting: The application of revenue recognition models in the engineering and construction industry

At a glance

Engineering and construction companies have alternatives when applying construction contract standards, including a method to calculate percentage of completion (input or output methods) or recognizing revenue, costs of revenue and gross profit (Revenue or Gross Profit method).

Companies in the Engineering and Construction industry have a number of different alternatives when applying the current construction contract standard, including selecting a method to calculate percentage of completion (input or output methods) and selecting a method of recognizing revenue, costs of revenue and gross profit (Revenue or Gross Profit method).

This paper primarily focuses on the technical guidance, policy elections and accounting for those companies that use a method of calculating percentage of completion other than cost-to-cost (e.g., physical progress).