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  • Interest Computation Under The Look-back Method For Completed Long-term Contracts

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For the filing year beginning OMB No. 1545-1031 Attachment Sequence No. Please print or type. , and ending 97 . See page 3 of the instructions. Name A Identifying number Fill In Your Address Only If You Are Filing This Form Separately and Not With Your Tax Return Number, street, and apt., room, or suite no. If a P.O. box, see page 3 of the instructions. B Check applicable box to show type of taxpayer: Corporation S corporation Individual City or town, state, and ZIP code Partners.

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About Form 8697, Interest Computation Under the...
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A long-term job contract is an employment agreement that typically extends past six weeks, and many last months or even years. You are often assigned more responsibilities as you become an integral part of the business. Some positions expect you to be willing to stay and grow with the company for a set period of time.

Next, long term contract accounting involves determining the appropriate method for recognizing revenue. The two main methods are percentage-of-completion (POC) and completed-contract (CC). POC recognizes revenue based on the percentage of work completed, while CC postpones recognition until the project is complete.

There are five steps needed to satisfy the updated revenue recognition principle: Identify the contract with the customer. ... Identify contractual performance obligations. ... Determine the amount of consideration/price for the transaction. ... Allocate the determined amount of consideration/price to the contractual obligations.

Long-term contracts generally must be accounted for using the percentage of completion method (PCM) of accounting.

Interest is computed under the look-back method to the extent that the taxpayer's total tax liability (including the alternative minimum tax liability) would have differed if the percentage of completion method had been applied using actual, rather than estimated, contract price and contract costs.

Look-back allows the taxpayer or IRS to recoup interest on income taxes generated by long-term contracts if taxes were overpaid or underpaid in any given year before the contract's completion.

The amount classified within stocks as long term contracts is costs incurred less amounts transferred to cost of sales less foreseeable losses and payment on account not matched with turnover. Any foreseeable loss should be recognised immediately in the profit and loss account.

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© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232
Form Packages
Adoption
Bankruptcy
Contractors
Divorce
Home Sales
Employment
Identity Theft
Incorporation
Landlord Tenant
Living Trust
Name Change
Personal Planning
Small Business
Wills & Estates
Packages A-Z
Form Categories
Affidavits
Bankruptcy
Bill of Sale
Corporate - LLC
Divorce
Employment
Identity Theft
Internet Technology
Landlord Tenant
Living Wills
Name Change
Power of Attorney
Real Estate
Small Estates
Wills
All Forms
Forms A-Z
Form Library
Customer Service
Terms of Service
DMCA Policy
About Us
Blog
Affiliates
Contact Us
Privacy Notice
Delete My Account
Site Map
All Forms
Search all Forms
Industries
Forms in Spanish
Localized Forms
Legal Guides
Real Estate Handbook
All Guides
Prepared for You
Notarize
Incorporation services
Our Customers
For Consumers
For Small Business
For Attorneys
Our Sites
US Legal Forms
USLegal
FormsPass
pdfFiller
signNow
airSlate workflows
DocHub
Instapage
Social Media
Call us now toll free:
1-877-389-0141
As seen in:
  • USA Today logo picture
  • CBC News logo picture
  • LA Times logo picture
  • The Washington Post logo picture
  • AP logo picture
  • Forbes logo picture
© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232