Recognition of loss understand, contract, recognized

nixie24

Dear all,

I am reading SS8 book 3, part revenue recognition of long term contract. Relating to percentage-of-completion method and completed-contract method, it is said that under either method if a loss is expected, the loss must be recognized immediately. I am not clear this point and don't understand how the loss is measured and when it is recognized.

It is very kind of you to make it clear for me by a simple example.

Thanks a lot.

My Best Regards,

Thu Thuy