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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.

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

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

Who Will Benefit

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.

Credits

Category Amount
Accounting 2.00
Auditing 1.00
Spec. Knowledge 1.00
Tax 4.00
Printed Materials must be ordered at least ten days prior to the start of the class.
Yikes, the time is near. Please call NMSCPA at (505) 246-1699 to register.

Leaders

  • Edward Zollars

    Edward K. Zollars, CPA, is in public practice in Phoenix, Arizona as a partner with the firm of Thomas & Zollars & Lynch, Ltd. He has been in practice for over twenty five years, specializing in tax issues for closely held businesses and individuals. Ed has been professionally involved with both tax and technology issues, combing the two disciplines in starting the first tax podcast (Ed Zollars Tax Update, produced weekly dealing with current tax issues. He has been a member of AICPA Tax Division Committees dealing with tax and technology issues, and was the Tax Section’s representative on three occasions to the AICPA’s Top Ten Technologies project. Ed is also a member of the Phoenix Tax Workshop’s Advisory Committee, and currently serves on the Tax Legislation Liaison Committee for the Arizona Society of CPAs. Ed was selected as a Life Member by the Arizona Society of CPAs in May of 2010. Ed is a co-author of the Arizona Income Tax Guide published by the Phoenix Tax Workshop, and has written articles published in Practical Tax Strategies and the Tax Adviser. He has been a frequent contributor to a number of professional tax discussion groups, and served as systems operator on the AICPA’s Accountants Forum in the mid 1990s. He has spoken regularly on tax and technology topics since 1996, speaking before conferences sponsored by the AICPA and a number of state society of CPAs.

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