In addition, cost estimates to complete must be up-to-date and as accurate as possible.  Once inception to date revenue is calculated, it is compared to the revenue recognized to date to determine what is to be recognized in the current period.  Finally, you must consider what has been billed to the customer since the inception of the contract.  If billings are in excess of revenue, revenue will be deferred until a future period.  If revenue is in excess of billings, an unbilled receivable will be recorded. 

Many companies have a mix of contracts types with each requiring different accounting treatment.  It is important for the contracts group to work with the accounting department to understand each contract and its unique requirements; this is particularly true for FFP contacts.