Contract Revenue Formula

State:
Multi-State
Control #:
US-03313BG
Format:
Word; 
Rich Text
Instant download

Description

Revenue sharing is a funding arrangement in which one government unit grants a portion of its tax income to another government unit. For example, provinces or states may share revenue with local governments, or national governments may share revenue with provinces or states. Laws determine the formulas by which revenue is shared, limiting the controls that the unit supplying the money can exercise over the receiver and specifying whether matching funds must be supplied by the receiver.


This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.

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FAQ

The completed contract method (CCM) allows all revenue and expense recognition to be deferred until the completion of a contract. CCM accounting is helpful when there's unpredictability surrounding when the company will be paid and when the project will be completed.

Revenue is most simply calculated as the number of units sold multiplied by the selling price.

Revenue collected because of services performed by the organization, products sold, or other instances where the organization exchanged something for money are called earned revenue.

Revenue recognized = Percent complete x contract amount Instead of costs, percentage of completion can also be calculated using units or labor hours, depending on the nature of the business. The important thing to remember is that contractors must be consistent in how they calculate the percent complete.

Calculations: Revenue to date = % complete * Contract price. Cost to date = Cost to date from previous year + Costs incurred in current period. % complete = Cost to date / Total estimated costs.

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Contract Revenue Formula