Percentage-of-completion Method

Percentage-of-completion Method means:
a method of reporting income from longterm contracts based on the percentage of a contract completed during the tax year. The costs allocated to the contract and incurred before the close of the tax year are compared to the total estimated costs of the completed contract. That percentage of completion is applied to the gross revenue from the contract to determine the amount to be included in taxable income for that tax year. Taxpayers using the percentage of completion method are also subject to the look-back rule for recomputing prior-year tax liability. Former IRC (check if this IRC provision is current here) §460.