The Invisible Load Every Contractor Carries In the construction industry, managing costs effectively is critical to profitability, compliance, and financial and tax reporting. Correctly identifying and allocating indirect contract costs is essential to this cost management. This blog will explore indirect contract costs, provide examples, explain their importance, discuss the benefits of proper allocation and risks of improper allocation, and outline some of the acceptable allocation methods under U.S. GAAP. What Are Indirect Contract Costs? Indirect contract costs are expenses that cannot be directly traced to a specific construction project but are necessary for overall project execution. Unlike direct costs—such
Read More »In Lite of the Election Results President-Elect Trump has increasingly touted new tax cuts for individual constituencies. Trump first proposed exempting tips from income tax, then discussed exempting Social Security payments from income. The focus on individual relief over corporate and business interests may reflect changes in voter sentiment. The consensus seems to be that Trump, and the Republicans will extend the TCJA as currently written, which the Congressional Budget Office estimates will add $4.6 trillion in debt over the 10-year budget window. That figure doesn’t include the cost of expensive new Trump tax proposals, such as lowering the corporate
Read More »It’s a Long Road That Never Turns Continuing Professional Education (CPE) for Certified Public Accountants (CPAs) is crucial to maintaining professional competence and staying current and compliant in the rapidly evolving accounting field. CPE is not just a requirement but a vital tool for professional growth and development. It can give you a deeper understanding. It can give you a broader perspective. It can also give you a much-needed break from actual (but paying) number crunching. However, the system can also be somewhat complex due to the various rules and requirements of the many reporting jurisdictions. And because of this
Read More »Common Pitfalls of this Middle Child Ahh — the Statement of Cash Flows, the bane of every staff accountant. This article will describe some of the pitfalls of preparing the Statement of Cash Flows. But first, a bit of history. When I first entered public accounting as a staff accountant during the Accounting Principles Board (APB) era, the Statement of Cash Flows was not a required financial statement. Instead, a Statement of Changes in Financial Position was required under GAAP. This legacy statement focused primarily on changes in working capital rather than cash flows. To the best of my memory,
Read More »Heads Up -Choose Very Carefully Under U.S. GAAP, there are three methods of accounting for a company’s investment in equity securities: Fair value method Equity method Consolidation The method of accounting depends on the level of control or influence the acquiring company has over the investee’s operating and financial policies AND whether the securities acquired have readily determinable fair values. However, remember that the method used is not elective or optional but is a matter of GAAP. We will discuss consolidations, but this article will focus on the fair value and equity methods. When the Method is Appropriate Fair Value
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