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A contracting firm anticipates that it will incur costs in excess of the contract price on a particular contract. The firm has completed two years

A contracting firm anticipates that it will incur costs in excess of the contract price on a particular contract. The firm has completed two years of work but the contract is only 60% complete.

What portion of the entire anticipated loss is recognized as of the end of the second year?

Which section of the authoritative literature best describes this situation and provides the appropriate guidance?

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