percentage-of-completion accounting

Percentage-of-completion accounting is a method used primarily in long-term projects, like construction, to recognize revenue based on the work that has been completed over time. Instead of waiting until a project is fully finished to report income, companies track the percentage of work done and report revenue and expenses accordingly. This approach provides a more accurate financial picture, reflecting ongoing progress, and helps businesses match revenues with costs incurred during the project. Essentially, it offers a way to show financial performance as a project unfolds rather than just at its conclusion.