Many taxpayers will choose to use PCM as their long-term contract method for their books (so they can give their banks and bonding companies the type of financial statements they prefer) and CCM (Completed Contract Method) for their tax returns (so they can have the maximum deferral of taxes).
When the adjusting Journal entries have been made, run the year-end financials again. The Income and COGS numbers should reflect only the completed projects for the year.
Be sure to mark these reports as “FOR TAX RETURN PREPARATION ONLY“.
When all necessary adjusted financial reports have been run, reverse the Journal Entries.