In construction, the percentage-of-completion method (PCM) is required for revenue recognition, unless certain exceptions apply. Even if an exception is met for regular tax purposes, the PCM is still required for calculating the AMT’s long-term contract adjustment. So, familiarity with the PCM is essential for all types of contractors and their CFMs.
How to Compute Percentage-of-Completion for Your Tax Return
If you are a CFMA member login to continue reading this article. If you aren't a member yet and would like unlimited access to all of the content on cfma.org, plus a variety of other benefits, join CFMA today!
About the Author
Alan K. Clark
Alan K. Clark is a Partner at Smith, Adcock and Company, CPAs, in Atlanta, GA. He has more than 44 years’ experience in public accounting, with a specialty in the construction industry.
Read full bio