What can such a company do if it takes a profit and then the contract ultimately results in a loss?

This news story deals with two companies (Capita and W S Atkins) both of whom are involved in the construction industry. If a contract takes longer than one year to complete, at what point should the company take any expected profit? A prudent approach would be to wait until the contract has finished. A highly imprudent one would be to take all the expected profit when the contract was signed. The accountancy profession’s answer is to take some profit on account provided certain conditions are met.