Over the last six months our Construction Industry team here at Lane Gorman Trubitt has been working on producing an informative video series covering the new revenue recognition guidance and how it will impact how contractors consider and account for revenue on its contracts with customers. During that time we have fielded questions about this topic and its impact on the construction industry. Here are the some of the most frequently asked questions.
Don’t overlook the research credit
Construction businesses are often surprised to learn that they may be eligible for the research tax credit, often referred to as the “research and development,” “R&D” or “research and experimentation” credit. Too often, they assume that this tax break is for only large pharmaceutical, biotechnology, software, and aerospace companies, so they don’t bother to investigate whether any of their activities qualify.
Ways to keep your profits on track
On any given morning driving into the office I pass 3-4 construction sites. In just the last month I’ve seen a small office building be demolished, cleared, and a pad being laid for a new building. Commercial and residential construction continues to flourish in the DFW Metroplex. While this is great news, there is a down side to this trend that contractors must be on the lookout for.
I think everyone would agree with the statement that a strong foundation is key to a successful project. The foundation is the base for which everything is built on so it must be able to bear the burden. In constructing the foundation, you have to consider many factors ranging from the ground it is being built on to the load it must help support. A solid foundation will stand the test of time whereas a poor foundation can lead to costly repairs.
What you need to know about ASU 2014-09
ASU 2014-09 is the newly released accounting standard update affecting revenue recognition in all industries. The reasoning behind these changes is to reduce inconsistencies and the risk of recognizing revenue incorrectly, to reduce the options of industry-specific U.S. GAAP guides and to create a collaboration between Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) for improved and converged rules.