Losses on Long-term Contracts
Other revenue before delivery
- Completion of production (agricultural products).
- Accretion basis (unsettled) occurs when value increases over time alone.
Losses on Long-term Construction Contracts
- Loss current period on ultimately profitable contract--Change in accounting estimate. Misstatement absorbed into the current period.
- Loss on entire contract, % completion--Reverse out prior profit and anticipate loss (conservatism). Recognize loss in the period it first becomes evident.
- Loss on entire contract, completed contract--Anticipate loss (conservatism), adjust as needed. Recognize loss in the period it first becomes evident.