... revenues in which they relate; and also the method in which revenue is recognized when production is completed or when prices of the assets change. There is also another method called the percentage-of completion method. In this method, revenue is recognized based on the completed percentage of a project and the contractual prices that were established in advance. This method is typically used in long-term projects. For example: if 65 percent of the job was completed in the current year, then 65% of the expected revenue will be recognized. Expense Recognition Methods Recognizing expenses is understanding that expenses are outflows or other using up of assets or incurrence of liabilities (or combination of both) from delivering or producing goods, rendering services, or carrying out other activities that constitute the entity's ongoing major or central operations (Marshall). Most expenses are easily identified such as equipment, supplies, etc. Others are not ...

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