What is percentage of completion in SAP SRD-FIN-COR - FIN-Cost and Revenue?

SAP Term: percentage of completion

• Component: SRD-FIN-COR

• Component Name: FIN-Cost and Revenue

• Description: The proportion of contract work completed. In the percentage-of-completion method of revenue recognition, the percentage is measured based on the actual costs incurred.

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• Key Concepts: 
  Percentage of completion is a method used in SAP to recognize revenue and costs associated with long-term contracts. It is based on the principle that revenue and costs should be recognized in proportion to the amount of work completed. This method is used when the outcome of a contract can be reliably estimated. 
  
  How to use it: 
  In SAP, percentage of completion is used to recognize revenue and costs associated with long-term contracts. The user must first enter the total estimated cost and revenue for the contract. Then, as work progresses, the user must enter the actual costs incurred and the percentage of work completed. The system will then calculate the amount of revenue and costs that should be recognized based on the percentage of work completed. 
  
  Tips & Tricks: 
  When using percentage of completion in SAP, it is important to ensure that the estimated cost and revenue are accurate. This will ensure that the system calculates the correct amount of revenue and costs to be recognized. Additionally, it is important to ensure that the actual costs incurred are accurately entered into the system. 
  
  Related Information: 
  Percentage of completion is part of SAP's SRD-FIN-COR FIN-Cost and Revenue Accounting component. This component also includes other methods for recognizing revenue and costs such as completed contract method and installment sales method.