What is construction accounting?
Construction is the process of organizing materials, labor and capital resources in such a manner as to build roads, dams, buildings, bridges and the like. It is an industry different from all others as well as being diverse within itself. The types of work performed will range from the general contractor who oversees every phase of the project to the specialty subcontractors who perform a specific part of the project, such as the electrical, concrete or plumbing contractor. The size of a project can range from rehabilitating a house to the construction of a superhighway or an office building and shopping complex. Construction accounting is the financial method employed to track the revenue and costs of the project from inception to completion. What are some accounting requirements specific to the construction industry? Generally accepted financial reporting in the construction industry requires revenues to be recognized using the percentage-of-completion method, which attempts to matc
