Companies must use the percentage-of-completion method when reliable estimates are available for each of the following except

Question

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The percentage-of-completion method is used to recognize revenue and expenses as progress is made on a long-term project. It requires estimates of progress toward completion, costs to complete the project, and the total revenue to be earned from the project. However, it does not require estimates of cash flows. Therefore, companies can use other methods, such as the cash basis accounting method, to track their cash flows during the project.

Companies Must Use the Percentage-Of-Completion Method When Reliable Estimates Are