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When is an estimated loss on a long-term contract recognized using the percentage-of-completion method The completed contract method?

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Question:

When is an estimated loss on a long-term contract recognized using the percentage-of-completion method

The completed contract method?

Answer:

An estimated loss on a long-term contract must be fully recognized in the first period the loss is

anticipated, regardless of the revenue recognition method used.

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Institution: Cambridge College
Course: Introduction to Economics

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