Basic Concept And Rules.

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The primary accounting issue in long term contracts is to determined the amount of profit to be recognition during financial period.The involves a continuous evaluation of estimate and assessment, and assessment of inherent uncertainties as a performance extends over several years. such uncertainty relate to buyer’s ability to settle the bills, contractor ability to perform a work,¬†estimating costs, unforeseen technical problems, and general economical conditions such as availability of credit and rate of inflation.

 

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