The percentage complete rule means that revenue is deferred or accrued, depending on the difference between the amount of the contract that has been invoiced and the amount of work done on the contract.

You determine the amount of work done by calculating the percentage of the contract that has been completed, typically by checking how much money has been spent working on the contract. You compare this amount to the amount of the contract that has been invoiced. If the amount invoiced is greater than the amount completed, the difference is deferred. If the amount completed is greater than the amount invoiced, the difference is accrued.