Construction Contractors: Advanced Issues

Chapter 1 1-1

Nature and Significance of the Construction Industry 1-1

Types of Contractors 1-2

Players in the Industry 1-3

Types of Contracts 1-4

The Role of the Surety 1-5

Contract Accounting 1-7

Additional Resources for the Construction Industry 1-10

Summary 1-11

Chapter 2 2-1

Strategic Planning for the Construction Contractor 2-1

Chapter 3 3-1

Internal Controls for the Contractor 3-1

What Are Internal Controls 3-3

Controls Specific to Construction Contractors 3-4

Summary 3-26

Chapter 4 4-1

Fraud and the Contractor 4-1

AU-C Section 240, Consideration of Fraud in a Financial Statement Audit 4-3

Identification of Certain Fraud Risks 4-5

Mitigating Fraud as a Construction Contractor 4-12

Summary 4-20

Chapter 5 5-1

Cash Management for the Contractor 5-1

Sources of Cash for the Contractor 5-3

Contractor Cash Flow 5-4

Summary 5-15

Chapter 6 6-1

Accounting for Joint Ventures 6-1

The Joint Venture 6-3

Accounting for a Joint Venture 6-5

The Joint Venture Agreement 6-6

Method of Organization 6-7

Members Ownership Percentage 6-9

Method of Accounting for the Member 6-10

Disclosures by Members of Joint Ventures 6-12

Impact of Joint Ventures Due to FASB ASC 460, Guarantees 6-13

Impact of FASB ASC 810, Consolidation 6-14

Summary 6-17

Chapter 7 7-1

Benchmarking the Contractor 7-1

Financial Benchmarking 7-3

Healthy Contractor Benchmarks 7-9

Non-Financial Benchmarking 7-11

Summary 7-14

Chapter 8 8-1

Construction Cost Allocations 8-1

Components of Job Costs 8-2

The Impact on Estimators and Project Managers 8-13

Selling, General, and Administrative Costs 8-15

Summary 8-18

Chapter 9 9-1

Assisting the Financially Troubled Contractor 9-1

Why Contractors Are Prone To Failure 9-3

Warning Signs for Potential Business Failures 9-5

Saving the Financially Troubled Contractor 9-6

Go From Attitude to Action 9-8

Summary 9-11

Chapter 10 10-1

Audit Risks of a Contractor 10-1

Audit Risk and the Audit Risk Model 10-2

Contractor Audit Risk Areas 10-4

Warning Signs for the Auditor 10-19

Applicability to a Review Engagement 10-21

Summary 10-22

Chapter 11 11-1

Deferred Income Taxes 11-1

Permanent and Temporary Differences 11-4

The Use of Enacted Tax Rates 11-7

Accounting for Uncertainty in Income Taxes Under FASB ASC 740 11-9

Summary 11-10

Chapter 12 12-1

Alternative Minimum Tax Considerations for Contractors 12-1

Exemptions from AMT 12-2

Calculation of the AMT 12-5

Minimizing the Minimum Tax 12-7

Summary 12-10

Chapter 13 13-1

Look-Back Method 13-1

Reporting the Calculation 13-3

The Computation of the Look-Back Calculation 13-10

Summary 13-21

Chapter 14 14-1

Tax Planning for the Contractor 14-1

Financial Analysis 14-3

Tax Planning Process 14-5

Summary 14-11

Appendix A A-1

The New Revenue Recognition Standard: FASB ASU No. 2014-09 A-1

Appendix B B-1

The New Leases Standard: FASB ASU No. 2016-02 B-1

Glossary Glossary 1

Index Index 1

Solutions Solutions 1

Chapter 1 Solutions 1

Chapter 2 Solutions 2

Chapter 3 Solutions 3

Chapter 4 Solutions 4

Chapter 5 Solutions 5

Chapter 6 Solutions 6

Chapter 7 Solutions 7

Chapter 8 Solutions 8

Chapter 9 Solutions 10

Chapter 10 Solutions 11

Chapter 11 Solutions 12

Chapter 12 Solutions 13

Chapter 13 Solutions 14

Chapter 14 Solutions 15