- | # Percentage Complete Method Select this method to recognize revenue on the basis of percentage of completion of a project/extension. The recognition of revenue with reference to the stage of completion of a contract is often referred to as the percentage of completion method. Contract revenue is recognized as revenue in the income statement in the accounting periods in which the work is performed. When to use this method This method is used for: Projects that have the contract type set to Fixed Price Contract. Projects that do not have hardware deliverables. Example: Engineering and development projects. Calculation of revenue recognized LN calculates the revenue recognized using the following formula:
      Revenue recognized = Percentage Complete * Contract Amount
  The contract amount is the sum of sub amounts by business partners. You can manually enter the percentage of completion or click Perc Completed to get the calculated value. LN calculates the percentage using the following formula:
      Percentage Complete = Costs (incurred)/ Estimate at Completion cost
Note: For extensions, the percentage complete must be entered manually, because the EAC is not defined for an extension. Levels at which it can be recognized: Project Extension Constraints: In the PPC Parameters (tpppc0100s000) session, Leading Forecast Method is set to Estimate to Complete or Estimate at Completion. The Build Actual Cost Control (tpppc4803m000) session must be executed to retrieve the latest aggregated cost (for project and extension) based on which the percentage complete is determined. Related topics Revenue Recognition (RR) and Cost of Goods Sold (COGS) |