The document is a guide on MSPCFO's methodology for recognizing revenue for fixed fee projects, focusing on aligning labor revenue with work performed for accurate project profitability assessment. These are some of the topics covered:

1. Revenue Recognition Methodology: MSPCFO recognizes revenue for fixed fee projects based on the actual work completed by team members, aligning labor revenue with work performed to provide a more accurate indication of project profitability. ​
2. Shadow Billable: This reflects the billable value of the work done on a fixed fee project, calculated as billable hours multiplied by the hourly rate. ​ It is used to determine the efficiency ratio and revenue attribution. ​
3. Efficiency Ratio: The ratio of invoiced labor to shadow billable, used to determine the "true up" revenue value in the final month of the project, ensuring accurate revenue distribution among team members. ​
4. Discount Rate: A default discount rate of 25% is applied to shadow billable to account for project uncertainties, which can be adjusted universally or per project to manage revenue recognition conservatively.
5. True Up Month: In the final month of the project, MSPCFO reconciles the total invoiced amount with the revenue posted to date, distributing any remaining revenue based on the project's efficiency ratio to the members who worked on the project. ​

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