Baumeister In HFP Practice Questions - Baumeisterin Baumeister Mit Eidgenössischem Diplom (HFP) Maître Entrepreneur-constructeur Avec Diplôme Fédéral Exam

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Under the Swiss Code of Obligations (Art. 958c OR) and Swiss commercial accounting practice, what is the primary prerequisite for applying the Percentage of Completion Method (POCM) rather than the Completed Contract Method (CCM) to recognize revenue on long-term multi-year construction projects (langfristige Fertigungsaufträge)?

A binding contract exists, total project costs and revenues can be reliably measured, and the stage of completion can be verified with high certainty The construction company must be listed on the SIX Swiss Exchange and have annual revenues exceeding CHF 100,000,000 The client must have deposited 100% of the total contract sum in a blocked Swiss escrow account prior to ground-breaking The cantonal commercial register and tax administration must grant joint advance written permission for each individual contract

Correct Answer:

A binding contract exists, total project costs and revenues can be reliably measured, and the stage of completion can be verified with high certainty

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