Percentage of completion accounting
An accounting method that recognizes revenue based on the percentage of work completed at the end of the billing period.
This accounting method provides a realistic view of a project's financial status by matching revenue recognition with the project's progress. It requires precise tracking of project milestones and costs, ensuring that financial statements reflect the actual work completed. This method is particularly important for long-term projects, helping to manage cash flow expectations and financial forecasting.
Used in a sentence
Use percentage of completion accounting to accurately report our project earnings.
Synonyms/variation
PoC
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