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In accounting for long-term construction contracts, the percentage-of-completion method is preferable to the completed contract method when:
# o( r& s0 F/ f$ C9 TA. the contracts are of a relatively short duration (less than one year). 9 C9 }+ W+ n, e4 y5 B6 e$ Z
B. estimates of the costs to complete and the extent of progress toward completion are reasonably dependable.
0 Q& N6 o3 t' y1 G) C$ O! |8 sC. lack of dependable cost estimates cause forecasts to be doubtful.& W8 x2 h8 s9 X1 m4 @
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