It’s been eight years since the Financial Accounting Standards Board (FASB) first proposed an overhaul of its revenue recognition standard and four years since it issued the new standard. Now the standard’s effective date is finally approaching — Jan. 1, 2019, for calendar-year nonpublic companies that comply with Generally Accepted Accounting Principles. Is your company [...]
Construction is a highly competitive industry in the private sector. But when it comes to public projects, winning a job can be even more cutthroat. That’s because government jobs are often subject to prevailing wage laws, such as the federal Davis-Bacon Act or the “little Davis-Bacon acts” that have been adopted in many states. Government [...]
Construction subcontracts often contain “additional insured” provisions. This legal language requires a subcontractor to name the owner, general contractor (GC) and higher-tier subcontractors (if applicable) as additional insureds under the subcontractor’s commercial general liability (CGL) policy. These provisions are designed to protect the other parties from liability in connection with the subcontractor’s activities on the project. But the existence of such a provision is no [...]
Most construction company owners want to retire someday, and just about every contractor is looking for ways to improve employee engagement and retention. One ambitious and somewhat complex way to do it all is by offering an employee stock ownership plan (ESOP). Establish a Trust An ESOP is a type of employee benefit plan, similar [...]
Traditionally, a contractor’s role is to build — that is, to implement a design created by an architect or other design professional. But given the vagaries of the industry, it’s not unusual for plans and specifications to be incomplete when construction begins. Contractors asked to help fill in these design gaps should proceed with caution. [...]
The passage of a new tax law in December was intriguing news for most construction company owners. Now that the dust has settled, let’s take a look at some of the highlights of the Tax Cuts and Jobs Act (TCJA). Tax Rates Reduced Most construction companies will see their tax rates go down in 2018. [...]
The construction contract documents published by the American Institute of Architects (AIA) are among the most commonly used forms on both commercial and residential projects in the United States. Although parties are free to modify these forms to suit their needs, it’s important to understand what the standard documents contain in order to negotiate appropriate [...]
Even the simplest construction project involves some degree of risk. Because of this, and the obviously higher degree of risk applicable to more complex jobs, owners will always seek to protect themselves financially. One way they continue to do so is through retainage. As you’re no doubt aware, under the concept of retainage, an owner [...]
The construction industry is characterized by tight profit margins and significant cash flow challenges. Your company’s success depends on strong financial leadership. To meet this need, many contractors reach a point where they should either appoint or hire a controller or Chief Financial Officer (CFO). But the differences between these two roles are often misunderstood. [...]
Many privately held construction companies prepare audited financial statements that comply with Generally Accepted Accounting Principles (GAAP) as established by the Financial Accounting Standards Board (FASB). They do so, at least in part, to satisfy the requirements of lenders, sureties and other business partners. Many of GAAP’s requirements benefit private businesses and their financial statement [...]
