Stage of completion, also known as percentage of completion, is a measure of the extent of work that has been completed in respect of a contract and is usually expressed in percentage terms. IAS 11 Construction Contracts requires accounting for construction contracts on the basis of stage of completion. Stage of completion may be measured in the following ways:
|Stage of Completion %||=||Value of Work Certified as complete||x 100|
|Total Expected Production or Usage|
|Stage of Completion %||=||Physical Units of Work Completed||x 100|
|Total Number of Units as per Contract|
When value based methods are used in accounting for profit making contracts and loss making contracts, revenue is recognized on the basis of work certified as complete whereas contract cost is measured as the balancing figure.
|Stage of Completion %||=||Costs incurred to Date||x 100|
|Total Contract Costs|