Accounting for long-term contracts by a taxpayer using the accrual basis (whether the revenue is earned by the contractor or paid to the contract owner or the main contractor) should be done based on the percentage of work completed during the tax year, according to the following formula:

The term "long-term contract" means a contract for manufacture, installation, construction, turn-key contract, or performance of related services (such as project management contract with the supervising engineer), that has commenced during the tax year but is not completed within the same year, other than a contract estimated to be completed within 6 months of the actual start date.

If a taxpayer fails to comply with the prescribed method in paragraph (1) of this Article to account for income from long-term contracts, the Authority has the right to determine such income as it deems appropriate based on available information and evidence.