Explain how the profit on incomplete concecpt is determined?

The profit on an incomplete contract is determined by assessing the proportion of work completed relative to the total contract value. This is often quantified using the percentage-of-completion method, which calculates revenue based on the costs incurred to date compared to the estimated total costs of the project. Any recognized revenue is then adjusted for the costs incurred, reflecting the profit earned on the completed portion of the contract. This approach ensures that profits are matched with the work accomplished during the reporting period.