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hello and welcome to this session in which we would look at long-term contract or long-term construction contract where the company actually incur losses the prerequisite for this session is understanding the percentage of completion method in the completed contract method so its critical if you dont understand how the percentage of completion method work if you dont understand how the completed method work please stop although im going to be showing you the percentage of completion briefly in an example but you really want to have a good understanding of those two methods before we discuss losses when it comes to long-term contract there are there are two type of losses that we have to learn about and deal with one loss is loss in the current period on a profitable contract and we deal with the situation when we are dealing with a percentage of completion method what does that mean it means we have a long-term construction project and lets assume its a four-year project year one
