Percentage of Completion Method (COGS)The Percentage of Completion method is used for long-term construction and other projects. This method allows you to recognize the revenues and expenses periodically, during the contract period, prior to the completion of the project/contract. As a result, you can estimate the project's future costs at the end of each reporting period in order to estimate the total gross profit to be earned on the project. You can use this method to calculate the cost of goods sold (COGS) when the Percentage of Completion is used as the revenue recognition method. Calculation of COGS COGS = Percentage Complete * Estimate at Completion(EAC) Revenue recognized = Percentage Complete * Contract Amount When calculating the COGS, Infor LN also considers the loss component. In which case: COGS = Revenue + Loss; where in Loss = Contract Amount - EAC Note For extensions, the percentage completed value must be specified manually because EAC is not defined for extensions. Levels at which the COGS can be recognized:
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