Work-in-Progress Percent Complete and Over/Under Billing
How complete a job is by cost, and the revenue that has been earned.
Example
You enter
- Contract value (USD) 500000
- Cost to date (USD) 300000
- Estimated total cost (USD) 400000
- Billed to date (USD) 350000
You get
- Percent complete 75
- Earned revenue $375000
- Over under 25000
Checked against published worked examples from: Pease Bell CPAs.
Details, formula, and sources
ScopeCost-to-cost POC: percent complete = cost to date / estimated total cost, earned revenue = percent x contract, over/under = earned - billed. $500K contract, $300K cost, $400K est, $350K billed -> 75%, $375K earned, +$25K underbilled (asset); billing $400K flips it to -$25K overbilled (liability). The CPA WIP schedule governs.
Formula or tablepct = min(cost_to_date / est_total_cost, 1); earned = pct x contract; over_under = earned - billed.
Source and editionThe cost-to-cost percent-of-completion revenue recognition and the over/under-billing schedule from construction accounting (ASC 606 / AICPA construction guide), by name.
Free accessCost-to-cost percent-of-completion and the WIP over/under-billing schedule are standard published construction-accounting methods.
What governsEstimate. AHJ and licensed professional govern.
API field namescontract_usd, cost_to_date_usd, est_total_cost_usd, billed_to_date_usd, pct_complete, earned_revenue, over_under
- Percent complete cost to date / estimated total cost, capped at 100%cost-to-cost POC
- Over/under billing earned revenue - billed to date (+ underbilled asset, - overbilled liability)construction accounting
- Estimate-driven accuracy depends on the estimated total cost; the CPA WIP schedule governsscope of this tile