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Conversion 101: Completed Contracts to Percentage of Completion

Updated: May 30, 2023

So you're on completed contract basis looking to convert to percentage of completion for your compilation, review, or audit.

There's a lot of work that goes into the conversion, but if you understand the process, it won't be such a grueling task. The basic idea involves taking a balance sheet account(s) and moving the activity to the income statement.


The example provided on the attachment is for a construction company that started in 2022 with three jobs open as of 12/31/22. The contractor was and is still on the completed contract basis. No journal entries were made in 2022 to convert the contractor to percentage of completion.

About the Reconciliation Spreadsheet:

Tab Reconciliation: This is the spreadsheet you'll use to reconcile your contract schedules to the trial balance after converting from completed contracts to percentage of completion. Amounts included in 2023 for illustrative purposes.

Tab Contract Schedules: Sample contract schedules included for reconciliation.

Tab General Ledger: Sample general ledger included for illustration purposes.

There's a lot to cover here, so I've decided to work on making a video tutorial for now instead of typing out all the steps. Feel free to have a go at reviewing the file for now.

Download the reconciliation to start the lesson.

Completed Contracts Conversion
Download XLSX • 24KB

The following video highlights the key differences between these two forms of revenue recognition:

As always, feel free to reach out with questions!


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