Long-Term Construction Contract Revenue Recognition Simulator

Compare revenue recognition differences between the Percentage-of-Completion and Completed-Contract methods.

Contract Information Input

Total Contract Price

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Year 1 Data

Costs Incurred to Date

Total Estimated Costs

Year 2 Data

Costs Incurred to Date

Total Estimated Costs

Year 3 Data

Costs Incurred to Date

Total Estimated Costs

Year 4 Data

Costs Incurred to Date

Total Estimated Costs

Annual Gross Profit/Loss Analysis

Method	Year 1	Year 2	Year 3	Year 4	Total

Analysis Summary

When a total loss is anticipated in Year 3, the Percentage-of-Completion method immediately recognizes the entire expected loss (-$200). In contrast, the Completed-Contract method recognizes the loss as it occurs. The cumulative profit for both methods is ultimately the same.

Cumulative Profit Comparison Chart