 HARDING, SHYMANSKI & COMPANY Certified Public Accountants and Consultants
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| Construction and Real Estate Industry | |
Because Harding, Shymanski & Company, P.S.C. is committed to providing quality service to our construction and real estate clients, we have selected a team of dedicated professionals to serve as your industry's consultants. These individuals understand the language and key issues unique to your industry and possess the drive and determination to help you manage your company on a proactive basis. |
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Updated Pension Plan Disclosures |
The Financial Accounting Standard Board (FASB) has recently passed legislation to increase the required disclosures for multiple-employer pension plans. Multi-employer pension plans are designed for workers (commonly union) in industries where it is not unusual to work for multiple employers during the course of their careers. According to FASB Chair Leslie F. Seidman "The enhanced disclosures will ensure that shareholders in companies that participate in these plans, workers who depend on them for their retirement benefits, as well as lenders and others will have more information regarding the employers' pension commitments and the financial health of the plans."
Before the recent approval of the new standards, employers only needed to disclose the amount of their total contributions to all of the multi-employer plans in which they participated. The new disclosures, however, require the following information:
- Amount of the employer's contributions made to each significant plan, as well as all plans in the aggregate.
- An indication of whether the employer's contributions constitute more than five percent of the total contributions to the plan.
- An explanation of any plans subject to a funding improvement plan.
- Any minimum funding agreements and the expiration dates of collective bargaining agreements.
- The most recent certified funded status of the plan, as determined by the plan's "zone status." If the "zone status" is not available, an employer is required to disclose whether the plan is greater than 80 percent funded, between 65 percent and 80 percent funded, or less than 65 percent funded.
These disclosures will be required in fiscal years ending after December 15, 2011 for public companies. For non-public companies, the updated disclosures will be required for fiscal years ending after December 15, 2012.
For more information about how the updated disclosures will impact your business, please contact Paul Esche, CPA, CCIFP, CCA at (800) 880-7800.
*"FASB Requires More Pension Plan Disclosures" article by Michael Cohn featured in Accounting Today.
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The Importance of Cash Flow | |
A recent article published in CFMA Building Profits discusses the importance of maintaining a positive cash flow in the construction industry. Quite often, contractors may become so involved in the opportunities associated with bidding on jobs and dealing with technical matters that the idea of collecting money owed to them is temporarily pushed to the side. However, the ability for a contractor to obtain a positive cash flow is regarded as a key characteristic of successful contractors. In fact, more contractors are forced to go out of business due to cash flow issues than a lack of backlog or profit.
Many cash flow issues begin when a job is initially bid, since contractors are often more concerned with obtaining a job rather than the cash flow associated with it. Consequently, following are five tips to consider when making a decision about whether or not to bid on a job:
- How busy will the company be when given notice to proceed?
- Has the company been successful with type of contract in the past?
- Is the job's location feasible?
- What is the possible impact of seasonal weather conditions?
- Are there any unusual contract clauses that could negatively affect cash flow?
Once a job is successfully obtained, there are other steps that may be taken to improve cash flows. Reducing or eliminating contract retaining terms can be an effective way to receive cash quicker. For example, if a contract states that 10% will be withheld, negotiate to lower the retainage as the job progresses, such as 5% when the job is halfway completed, and 1-2% when the job is substantially completed.
In addition, a proactive approach should be taken to collecting cash, with cash collections being regarded as a frequent, routine process. Not only should steps be taken to expedite cash inflows, but cash flows can also be benefited by reasonably delaying payments. Mailing checks as late as possible (but still within payment terms) can maximize the availability of cash for investment purposes.
For more details on maximizing your company's cash flows, please contact Randy Schulz, CPA at (800) 880-7800.
*"Cash: The Lifeblood of Every Contractor" article by Anthony Stagliano featured in the May-June 2011 issue of CFMA Building Profits magazine.
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Metro Louisville Assessment Moratorium Program | |
The assessment moratorium program provides an incentive for making improvements to qualifying buildings located in the Louisville metropolitan area by providing a five year property tax break for the local tax assessment that would result from the improvements. The property tax break created by the moratorium program applies only to the local tax rates. The state rate, school rate and non-participating governments will continue to apply rates at the annually adjusted value. Structures eligible for the moratorium must be at least 25 years old and comply with at least one of the following criteria:
- Costs incurred to repair, rehabilitate, restore or stabilize is greater than or equal to 25% of the total value of the building improvements.
- The property is within a "target area" as identified by the the Jefferson County Property Valuation Administrator (PVA). In this case the costs incurred to repair, rehabilitate, restore or stabilize must be greater than or equal to 25% of the total value of the building improvements.
- Once the improvement is completed, the property will be a LEED certified property based on the Leadership in Energy and Environmental Design standards.
Moratorium certificates will not be issued on a property in which there are delinquent Metro tax bills. Applications for the moratorium may be completed and submitted to the Construction Review Division of Codes and Regulations at least 30 days before construction work on the property is begun.
For more information on the benefits of the moratorium for your Louisville area business, please contact Michael Cameron, CPA at (800) 880-7800.
Obtained from the Louisville, KY website (www.louisvilleky.gov)
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Harding, Shymanski & Company, P.S.C. provides accounting, tax, and consulting services to our clients from offices in Evansville, Indiana, and Louisville, Kentucky.
We are committed to quality. Adding value to the services we provide is our most important goal. Our unwavering dedication and commitment to quality resonate throughout every aspect of our work.
Call us today! (800) 880-7800
www.hsccpa.com
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| Disclaimer |
The information contained in this email is for general guidance on matters of interest only. The publication does not, and is not intended to provide legal, tax or accounting advice. |
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