Under Construction method if total estimate changes after 3yrs and we are to calculate revenue of 2nd year, do we use shortcut or long method?
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There is no such method called construction method….
Maybe u are referring to the percentage
Of completion method used quite often in the construction industry where percentage of completion is judged based on cost incurred as a percentage of estimated total cost.
If estimate chnages , we are required to use the new estimate and compute the cumulative revenue that should have been recognized till the end of year 3 and then deduct the revenue recognized till year 2 and we get the revenue to be recognized in year 3
Thank you Sir and sorry for mistakenly writing construction method.