Glossary
What is Percentage-of-Completion Accounting?
Percentage-of-completion (POC) is a revenue recognition method used in construction accounting where revenue and profit are recognized gradually over the life of a contract based on the percentage of work completed.
Definition
Percentage-of-completion (POC) accounting is a method of revenue and profit recognition used in long-term construction contracts. Instead of recognizing all revenue when a project is completed, you recognize it proportionally as work is completed. Most construction companies with contracts longer than a year use POC for GAAP and tax purposes.
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