There are generally three cost categories in construction: direct costs, indirect costs and general and administrative expenses (G&A). The word overhead is sometimes used interchangeably to describe indirect costs and G&A expenses. However, indirect costs should be thought of as field overhead while G&A expenses should be thought of as company overhead. G&A expenses are …
The COVID-19 pandemic has thrown a curveball that caused a unique environment in every industry. To most construction companies the pandemic had no significant effect on volume, however, most contractors are worried about what the future holds and believe that curveball is still making its way to the plate. While there are theories of how …
Construction companies who value employees as their most important asset are set to be successful during good and bad economic times. It is no secret that there is a significant labor shortage problem in the construction industry that is influencing project performance and profits. While construction workers seem to be the main beneficiaries of being …
Topic 606, Revenue from Contracts with Customers, of the Accounting Standard Codification has been discussed extensively for the past few years and while most discussions focus on the technical issues, I want to discuss application of the standard, particularly on how it affects the construction industry. Don’t miss: Accounting for payments and discounts to customers …
The new revenue recognition has been discussed extensively for the past few years and while most discussions focus on the technical issues, I like to discuss application of the standard, particularly on how it affects the construction industry. On a previous blog, I discussed contract fulfillment costs and how these costs are treated under the …
The new revenue recognition standard has been discussed extensively for the past few years and while most discussions focus on the technical issues, I like to discuss application of the standard, particularly on how it affects the construction industry. In a previous blog, I discussed the importance of adopting the new standard and how it …
By now most of us are experiencing information overload on the new revenue recognition standard and are contemplating to jump ship before the standard comes into effect. The Accounting Standard Codification introduces Topic 606 (too close to triple-six if you ask me), Revenue from Contracts with Customers, and it is effective to all nonpublic companies …
As an auditor of companies in the construction industry, I often ask clients about the performance of specific jobs in their contracts schedule, also known as a WIP schedule or Jobs schedule. The job inquiries are designed to uncover potential contract-related accounting issues that should be corrected for adequate and useful financial reporting. These questions …
My heart, as many others, goes out to the people of Houston and the surrounding cities and towns affected by Hurricane Harvey. I experienced the storm surge created by Hurricane Isabel in 2003. My home was within inches of flooding and my next door neighbor completely lost his home simply because the typography of his …
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