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(i) Percentage of completion method (ii) Completed contract method.

The above two methods are commonly followed by the contractors for the revenue recognition.

(i)                 Percentage of Completion Method. The percentage of completion method refers to the income earned by the contractor determined on the basis of progress of the contract. Under this method, current assets may include costs and recognized income not yet billed with respect to certain contracts.

(ii)               Completed Contract Method. Under this method, incomes are recognized only when the contract is completed or substantially so.