completed contract method

简明释义

完成合同法

英英释义

例句

1.Many contractors prefer the completed contract method because it simplifies accounting during long-term projects.

许多承包商更喜欢完工合同法，因为它简化了长期项目的会计处理。

2.Under the completed contract method, all expenses related to the project are recorded in the same period as the revenue recognition.

根据完工合同法，与项目相关的所有费用在收入确认的同一期间内记录。

3.The construction company decided to use the completed contract method to recognize revenue only after the project was fully finished.

这家建筑公司决定采用完工合同法，仅在项目完全完成后确认收入。

4.The completed contract method is often used in industries like construction, where projects may take several years to complete.

在建筑等行业中，通常使用完工合同法，因为项目可能需要数年才能完成。

5.Using the completed contract method can lead to significant fluctuations in financial statements from year to year.

使用完工合同法可能导致财务报表在年度之间出现显著波动。

作文

The construction industry often faces numerous challenges when it comes to accounting for long-term projects. One of the most widely used methods to handle this complexity is the completed contract method. This accounting method allows companies to recognize revenue only when a project is fully completed, which can provide a clearer picture of a company's financial health at the end of the project. By using the completed contract method (完工合同法), businesses can avoid recognizing revenues and expenses prematurely, which might distort their financial statements. When a construction company embarks on a new project, it typically incurs various costs over the life of the project, such as labor, materials, and overhead. If a company were to use the percentage-of-completion method instead, it would have to estimate the total costs and revenues throughout the project’s duration. This estimation can be challenging and may lead to inaccuracies in financial reporting. In contrast, the completed contract method simplifies this process by deferring all revenue and expense recognition until the project is finished.This method is particularly beneficial for projects that are long-term and complex, where the outcome might be uncertain until completion. For instance, a large infrastructure project may take several years to complete, and during this time, costs can fluctuate significantly. By utilizing the completed contract method, a company can ensure that its financial statements reflect the true performance of the project once it is finalized. This method also aligns with the matching principle in accounting, where revenues should be matched with the expenses incurred to generate them.However, the completed contract method does have its drawbacks. Since revenue and expenses are recognized only upon completion, this can lead to significant fluctuations in reported income from year to year. A company may show little to no revenue in the years leading up to project completion, followed by a substantial spike in income once the project is done. This inconsistency can make it difficult for stakeholders to assess the company’s ongoing performance and financial stability.Moreover, the completed contract method may not be suitable for all types of businesses. Companies that engage in shorter projects or those that require more frequent revenue recognition may find the percentage-of-completion method more appropriate. Additionally, the choice between these methods can depend on industry standards and regulatory requirements, which vary across different sectors.In conclusion, the completed contract method (完工合同法) serves as a valuable tool for construction companies and other businesses involved in long-term projects. It provides a clear and straightforward approach to revenue recognition, ensuring that financial statements accurately reflect the outcomes of completed projects. While it presents some challenges, particularly in terms of income variability, it ultimately helps companies manage their financial reporting more effectively. As the construction industry continues to evolve, understanding the implications of different accounting methods like the completed contract method will remain crucial for financial transparency and accountability.