Question:
An article published in Accounting Horizons describes the current accounting practices and disclosures
for longterm contracts for the Fortune 500 companies.
Required:
In your library or from some other source, locate the indicated article in Accounting Horizons, September
200 ,and answer the following questions:
1. How many firms reported the use of one of the two long-term contract accounting methods?
2. Approximately half of the firms are in which industry?
3. How many firms reported the use of the percentage-of-completion method? The completed
contractmethod?
4. What is the most frequently used approach to estimating a percentage-of-completion?
Answer:
(Note: This case requires the student to reference a journal article.)
1. Fifty-five firms reported the use of one of the two long-term contract accounting methods.
2. Twenty-seven of the firms are manufacturing companies.
3. Only one company uses the completed contract method. That company reported using both
methods.
4. The most frequently used approach to estimating a percentage-of-completion is the cost-to-cost
method.
An article published in Accounting Horizons describes the current accounting practices and disclosures
for longterm contracts for the Fortune 500 companies.
Required:
In your library or from some other source, locate the indicated article in Accounting Horizons, September
200 ,and answer the following questions:
1. How many firms reported the use of one of the two long-term contract accounting methods?
2. Approximately half of the firms are in which industry?
3. How many firms reported the use of the percentage-of-completion method? The completed
contractmethod?
4. What is the most frequently used approach to estimating a percentage-of-completion?
Answer:
(Note: This case requires the student to reference a journal article.)
1. Fifty-five firms reported the use of one of the two long-term contract accounting methods.
2. Twenty-seven of the firms are manufacturing companies.
3. Only one company uses the completed contract method. That company reported using both
methods.
4. The most frequently used approach to estimating a percentage-of-completion is the cost-to-cost
method.
