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Completed Contract
What is a Completed Contract?
A completed contract, in the context of the construction industry, is a concept relating to the financial recognition of a project. In specific accounting terms, it represents a method where all the costs and profit related to the contract are recognized only after the project has been finished and fully executed. This means neither revenues nor expenses are recorded in company books until all the work stipulated in the contract is fully accomplished. This approach contrasts with the percentage-of-completion method, which requires ongoing recognition of revenues and costs as the project advances. The completed contract method is often chosen for projects where outcome and costs are uncertain, essentially to prevent financial discrepancies.
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Other construction terms
What is Breaking Ground?
Breaking ground refers to the official start of construction on a project, typically marked by the initial digging into the ground. It’s the first step toward site preparation, which involves various tasks, like soil testing, land clearing, excavation, leveling, etc. The term originates from the literal act of "breaking" or disturbing the ground to begin foundation work.
Breaking ground marks the transition from pre-construction activities (permitting and design finalization) to actual building work. This is when project timelines become essential to track, material deliveries need coordination, and subcontractors start mobilizing their teams and equipment to the job site.
Once its time to start building, it’s time to start billing. Siteline helps subcontractors streamline their pay app and lien waiver processes, eliminating bottlenecks that can hold up payments for faster payments. Learn more about Siteline.
What is a Champion?
A Champion within the construction industry is an individual who plays a critical role in spearheading and facilitating successful implementation of a project, plan, method or innovation. This individual possesses leadership qualities, and is responsible for rallying support, encouraging commitment, and bringing together teams and resources necessary for a project's success. He or she communicates the vision of the project and ensures everyone involved understands and is aligned with the mission. A Champion also works to resolve any issues that may arise, making critical decisions based on their wide range of expertise. They are crucial to the success of construction initiatives, serving as a driving force that encourages progress and ensures high-quality results.
What is Conditional?
In the construction industry, the term "conditional" typically refers to a state or situation where certain obligations, requirements, or criteria must be met for a particular outcome or transaction to occur. This term is often used in contracts or agreements. For instance, a construction project could be conditional upon gaining necessary building permits or approvals, meeting safety standards, or obtaining adequate funding. The failure to fulfill these conditions could suspend or terminate the project.
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