Construction Contractors-Special Tax and Accounting Considerations

Description

This program explains and illustrates special accounting and auditing issues related to the construction industry, contractor specific disclosure rules, and current accounting and auditing developments. On the tax side, the program examines the similarities and differences of tax and financial reporting for percentage of completion and completed contract method, and other permitted methods of accounting. Adjustments for the "look-back" rules will be considered under various scenarios. Practical application is provided through audit program examples and financial statement presentation and disclosure issues.

Highlights

Accounting:
Over and under billings
New revenue recognition standard and new lease standard for contractors
Consolidation of variable interest entities
Deferred income taxes
Disclosure of risk and uncertainty
Audit program for contract related items, applying risk analysis to contractors' operations, and required disclosures
Tax:
Cash versus accrual
Accounting methods available to small contractors
Percentage of completion vs. completed contract
"Look-back" rules
AMT
Sec. 460 regulations on accumulation of contract costs
Homebuilder/developer regulations, the qualified business income deduction, expanded small contractor relief, and the IRS Audit Techniques Guide for the construction industry

Objectives

Participants will be able to:
Understand the definition of "long-term contract"
Present a contractor's financial information in accordance with U.S GAAP
Calculate a contractor's bonding capacity
Calculate "look-back" adjustments to taxable income
Apply IRC Secs. 263A and 460 to cost accumulation
Efficiently audit a contractor
Plan financial and tax transactions to assure maximum bonding capacity
Advise contractors on how business decisions affect financial statements and tax returns
Comply with new tax and accounting rules

Designed For

CPAs in public practices and accounting and financial professionals in the construction businesses who prepare tax returns, are responsible for financial statements, and provide tax and financial advice to construction contractors.