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Question:
A construction firm uses the percentage-of-completion method to recognize revenue from long-term contracts. In its next reporting period, the firm will adopt the converged accounting standards that were issued in May 2014. Compared to the prior accounting standards, in that period the firm is most likely to recognize:
A
the same revenue.
explanation
Revenue recognition for long-term contracts under the converged accounting standards issued in May 2014 is based on progress toward satisfying the performance obligations in the contracts, which is comparable to the percentage-of-completion method under the prior accounting standards.
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