The Good Liability?

The Upside Down If you are a fan of the popular Netflix science fiction horror series Stranger Things, then you are familiar with The Upside Down. For those who are not acquainted with the series, The Upside Down could be described as an alternate parallel dimension that is not too human friendly, to say the least. The world of construction accounting is viewed by many as somewhat of an upside-down, with a strange language consisting of such terms as POC, under billings, overbillings, ASC 606, phase codes, related parties and, worst of all, though certainly not unfamiliar, income tax. The Read More »

Is Your Company Strong enough for Bonding?

How to Determine if Your Company is Strong Enough for Bonding If you are building a construction business, you will most likely want to bid on projects that require bonding. Public works projects especially require bonding to demonstrate your business is trustworthy and financially stable enough to take the project on, enough that a bonding company is willing to guarantee your performance. That presents a paradox for young businesses that lack the net worth and working capital to meet surety underwriting criteria. If they can’t meet the criteria, they can’t land profitable projects that require surety bonds. If they can’t Read More »

Buying a Business?

What it Takes to Get to the Finish Line Buying a business is one of the most complex transactions you will ever experience. The many and often varied steps leading up to the closing agreement are critical in determining which party walks away with the better end of the deal. From the time you decide on the business you want to buy, the process is a series of negotiations with both parties seeking the upper hand. You meet with the seller, make your opening bid and negotiate the key purchase terms. But that is all preliminary – simply the prelude Read More »

Thinking of Selling Your Business?

How the Deal Structure Can Impact the Sale After all the painstaking time and effort it takes to build a business, it probably wouldn’t dawn on a business owner that selling a business could be as challenging as it is. The good news is there are primarily two ways to structure a sale – an asset sale or a stock sale. However, determining which one would be most beneficial requires a thorough evaluation of several factors. In addition, because buyer and sellers are impacted differently by tax implications, they tend to favor different structures. That can make it more difficult Read More »

The Impact of IRC Sec 460 on Contractors’ Cash Flow Management

At nearly 75,000 pages the Internal Revenue Code is the bane of most industries, but none more so than the construction industry which has a whole section of the code targeting its accounting procedures. IRC Section 460, created in 1986, is as complex a section as there is, especially where it concerns the treatment of income from long-term contracts. However, for construction contractors who take the time to understand the intricacies Sec. 460, there are many tax planning opportunities to be found which can substantially improve their cash flow situation. IRC Section 460 Treatment of Long-Term Contracts Sec. 460 establishes Read More »
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