Work-in-Progress Percent Complete and Over/Under Billing
Cost-to-cost POC: percent complete = cost to date / estimated total cost, earned revenue = percent x contract, over/under = earned - billed. $500K contract, $300K cost, $400K est, $350K billed -> 75%, $375K earned, +$25K underbilled (asset); billing $400K flips it to -$25K overbilled (liability). The CPA WIP schedule governs.
Formula and source
pct = min(cost_to_date / est_total_cost, 1); earned = pct x contract; over_under = earned - billed.
The cost-to-cost percent-of-completion revenue recognition and the over/under-billing schedule from construction accounting (ASC 606 / AICPA construction guide), by name.
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