Completed Project Method (COGS)
Select this method to calculate COGS on completion of a contract.
When to use this method
This method is used when you prefer to calculate COGS only on completion of the contract.
Calculation of COGS
COGS = COGS Percentage Completed * Estimate at Completion(EAC)
Revenue recognized = Percentage Complete * Contract Amount
When calculating the COGS, LN also considers the loss component. In which case:
COGS = Revenue + Loss; where in Loss = Contract Amount - EAC (estimate-at-completion)
Levels at which it can be recognized:
- Project
- Contract
- Extension
Constraints
- The project status must be closed.
- The extension status must be closed.