Certified Construction Industry Financial Professional (CCIFP) Practice Exam

In IRS 460, contract completion for a long-term construction project is tied to progress milestones and final status. The contract is considered complete at the earlier of two events: either the project is usable by the customer and 95% of allocable costs have been incurred, or the project reaches final completion and is accepted by the customer. This means revenue and tax recognition can occur when substantial progress has been made and the project can be utilized, or when the job is finally completed and formally accepted. This is the best choice because it recognizes completion based on real progress (the heavy lifting is mostly done, costs are near fully incurred) while also keeping a safety net for formal final completion and customer acceptance. It prevents delaying recognition too long if the project becomes usable and costs are largely incurred, and it also accounts for situations where final acceptance occurs later. Options that rely on only final completion, or only one milestone without the parallel condition, would either delay recognition unnecessarily or ignore an important progress trigger.