Overview of interim revenue recognition in Project Control (PCS)Products manufactured used projects in Project Control (PCS) often have long lead times. During the projects, actual costs are recorded. Revenues and cost of goods sold can be determined at the end of the project when the products are finished and delivered. However, international accounting rules such as IFRS (International Financial Reporting Standards) require greater transparency in business financials. Public companies must be able to recognize costs and revenues not only at the end of the project but also at different times during the project. With revenue recognition in PCS you can determine the interim revenue and interim COGS for an unfinished project, even before shipping any end item. These terms are used in interim revenue
recognition
Percentage of completion To determine the interim COGS and interim revenues at a specific moment, you must first determine which percentage of the work on the project is completed. You can use three methods to calculate the percentage of completion (POC):
This calculation is used to calculate interim revenue at a specific point: To calculate the interim COGS on a specific point: Procedure for interim revenue recognition To calculate interim COGS and revenue, you must go through these of sessions:
The details are described in Recognizing Interim Revenue in Project Control
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