Under which two situations can a firm utilize the percentage completion method to recognize revenue as...

Under which two situations can a firm utilize the percentage completion method to recognize revenue as the asset for sale is being constructed?

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Expert Solution

The firm can utilize the percentage completion method to recognize revenue as the asset for sale is being constructed when:-

1. There is a certainty that collections will be received.

2. The cost and rate of the project of completion must be ascertainable to allocate the profit to each year.

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