Professional Accounting Blog

    Accounting For Your Prosperity

    Using Construction Technology can Result in Significant Cost Savings and Efficiencies

    Posted by Carlin Culbertson on Aug 2, 2019 10:39:44 AM

    Topics: Construction

    I recently attended a construction conference and one of the sessions featured a speaker from Dodge Data and Analytics, who do a lot of research related to the construction industry.  Part of the presentation focused on industry technology and the impact it’s having on construction firms.  Here are some of the takeaways.   

    Building Information Modeling (“BIM”) software is already in use at a lot of contractors.  It is software that allows a contractor to create a digital model/plan of a building, highway, etc. which has significant advantages over a traditional blueprint or paper-based plan.  It provides a great visualization tool to job owners during the bid and planning phases, during the construction process to provide updates/check progress, and when the project is finished provides a complete digital map of the final project to the job owner.  It can be adjusted easily if a change is needed to the design.  It can be used for projections and what if scenarios (like where should I position a large crane, what’s the most efficient placement for materials staging), among other uses that help with planning and in turn reduce inefficiencies.  It can also be used to track progress compared to the plan, catch potential issues earlier, and reduce rework.  Even though it is commonly called BIM, it applies to construction projects other than just buildings, such as civil projects.  To show how BIM can reduce time and costs, the presentation mentioned that Turner Construction reported efficiency increases of 143% for mechanical, 67% for plumbing, and 36% for fire protection from using BIM and related resources.  Some of the other technologies available today integrate with BIM making it even more powerful.  Learn more about BIM here. 

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    How the New Revenue Rules Impact E&C Industry Financial Reporting

    Posted by Meaden & Moore on Feb 7, 2019 8:00:00 AM

    Topics: Accounting & Auditing, Construction

    Back in 2014, new financial reporting rules were issued for companies who generate revenue from contracts with customers. Included in the scope of the new standards are engineering and construction (E&C) companies, where it is customary business practice to enter into contracts with customers, subcontractors, consultants, and other vendors.

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    2019 Revenue Recognition: How Meaden & Moore Can Help Construction Contractors

    Posted by Meaden & Moore on Feb 1, 2019 8:00:00 AM

    Topics: Accounting & Auditing, Construction

    The Financial Accounting Standards Board (FASB) issued new rules for how to recognize revenue from contracts with customers. The new revenue rules contain a number of considerable changes that impact the ways companies account for revenue, including those in the construction industry.

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    What Aluminum and Steel Tariffs Mean for Your Construction Project

    Posted by Meaden & Moore on Oct 25, 2018 8:00:00 AM

    Topics: Accounting & Auditing, Construction

    In March 2018, the United States imposed steel (25%) and aluminum (10%) tariffs on imports from Canada, Mexico, and the European Union. Both steel and aluminum are significant components of construction materials, but how significant will steel and aluminum tariffs impact the overall cost of construction on a typical construction project?

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    Identifying and Combating Construction Change Order Fraud

    Posted by Meaden & Moore on May 8, 2018 3:40:56 PM

    Topics: Accounting & Auditing, Construction

    In part I of our series, How to Spot Construction Change Order Fraud, we highlighted examples of change order abuse. In this post, we will dig deeper into ways to identify threatening behavior ahead of time and ways to prevent change fraud.

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    Steady Construction Industry Growth Expected in 2017 and Beyond, Despite Uncertainties

    Posted by Lloyd Bell on Aug 3, 2017 11:36:33 AM

    Topics: Construction, Corporate Finance

    The following overview of construction industry trends is part of a larger series of industry reports that will be published between August and October 2017 for the benefit of our subscribers. Data and information provided is cited from IBIS World, a global business intelligence leader specializing in Industry Market Research.

    In 2016, Meaden & Moore clients in the construction industry experienced a 4.8% decrease in revenue. This decrease was offset by a 6.3% decrease in cost of sales, allowing for a 17% increase in net income. The construction industry as a whole experienced unexpected revenue growth at 7% in 2016. Most of the industry growth in 2016 occurred during the fourth quarter as commercial, multifamily housing, and public work construction unexpectedly skyrocketed. In comparison, by October of 2016 the year’s growth was expected to be 1%. Revenue for the industry is expected to increase 5% in 2017 as conditions stabilize.

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    The Skills Gap – An Ongoing Challenge for the Construction Industry

    Posted by Meaden & Moore on Jul 26, 2017 12:29:05 PM

    Topics: Accounting & Auditing, Construction

    We often read and hear in the news that there is a serious problem in America due to the significant skills gap between candidates and the needs of employers.  This disparity impacts all industries, but arguably none more than the construction industry.

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    AICPA Weighs-In on New Revenue Recognition Rules for Contractors

    Posted by Meaden & Moore on Jan 24, 2017 8:00:00 AM

    Topics: Accounting & Auditing, Construction

    Recently, the American Institute of Certified Public Accountants (the "AICPA"), through its industry-specific tax force, released proposed guidance on how to implement new revenue recognition standards for engineering and construction contractors.

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    Making Sense of Sales & Use Tax Rules for the Construction Industry

    Posted by Meaden & Moore on Aug 3, 2016 9:28:28 AM

    Topics: Tax Planning & Strategies, Construction

    During the last recession, state tax departments saw a decrease in revenue and struggled to create new cash flows to replace what was lost due to taxpayer income reductions. States responded by increasing their audit activity to replace the lost revenue. Most states pursued sales and use tax audits as there was a greater likelihood of audit findings with related penalties and interest.    

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    Consolidated vs. Combined Financial Statements - Unraveling the Mystery

    Posted by Meaden & Moore on Jul 14, 2016 10:07:27 AM

    Topics: Construction

    Back in 2001, we witnessed the Enron accounting scandal, which led to one of America’s largest corporate bankruptcies and the demise of the prestigious accounting firm Arthur Andersen. A key ingredient in Enron’s accounting plot involved the use of special purpose entities (SPEs). These entities held billions of dollars of debt and incurred substantial losses, yet through loopholes in the accounting standards, they were never reported (i.e. consolidated) into Enron’s accounting records.  

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