IAS 11: Construction Contract – recognises these methods of determining stage of completion:

i. Contract cost to date in proportion to estimated total contract costs (The cost basis) This estimates the stage of completion by comparing the contract costs incurred to date to the total contract costs expected to be incurred over the life of the contract. This involves estimating the future costs that will be necessary to complete the contract.

ii. Percentage of work (Sales basis) This estimates the stage of completion by comparing the sales value of the work performed to date to the total contract revenue. As a contract progresses, at periodic intervals, an independent expert such as a surveyor may inspect the work, and issue a certificate stating the amount or value of the work done so far. The most recent certificate issued by the independent expert provides a basis for judging the proportion of the contract work that has been completed.

iii. Use the physical proportion of the contract work that has been completed.