Answer Happy

Birmingham Construction is a home builder in Atlanta, Georgia.
This company builds high-priced, custom made, single family homes
and operates throughout Atlanta. The typical construction period
for an average home build is approximately six months, although
some houses can take as long as nine months. You have just been
hired by Birmingham as the senior accountant and your first task is
to evaluate Birmingham’s revenue recognition policy. Currently, the
company recognizes revenue when a project is completed. The company
has asked you to perform an evaluation and determine if it would be
more appropriate and beneficial to recognize revenue over time.
Write a 1-page memo to Jane Miller, company controller,
describing what you determined after completing your analysis.
Describe some of the differences of the effects on the income
statement and balance sheet of recognizing revenue over time and
when the project is completed. Include some discussion on criteria
that specifies when revenue should be recognized and be sure to
include references to Generally Accepted Accounting Principles
(GAAP) as they pertain to the method choice.