Winning Strategies in the War for Talent  

A top concern for most construction companies is the future of the workforce, including both field and office personnel. During the last several months, contractors have seen an increase in bidding opportunities with less competition, along with increased gross margin, which indicates a growing need for personnel. When the economy was in a downward spiral, many construction workers left the industry and haven't returned. Plus, overwhelmed numbers of workers are retiring and fewer people are joining the industry. All of these factors have combined to create a war for talent.

Companies can use several strategies to help retain current employees and attract new ones. Click here to read the full article.
Revenue Recognition and Leases New Accounting Standards

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This standard outlines a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that revenue is recognized when a customer obtains control of a good or service. A customer obtains control when it has the ability to direct the use of and obtain the benefits from the good or service. Transfer of control is not the same as transfer of risks and rewards, as it is considered in current guidance. An entity will also need to apply new guidance to determine whether revenue should be recognized over time or at a point in time. In August 2015, the FASB issued ASU 2015-14 which defers the effective date of ASU 2014-09 one year. Public business entities will apply the guidance to annual reporting periods beginning after December 15, 2017 (applicable to the December 31, 2018 year for a calendar year entity). All other entities will apply the guidance to annual reporting periods beginning after December 15, 2018 (applicable to the December 31, 2019 year for a calendar year entity). 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The standard is effective on January 1, 2019 for public business entities and on January 1, 2020 for all other entities, with early adoption permitted.

For more information contact Greg Elpers, CPA at 800.880.7800 ext. 1352 or email gelpers@hsccpa.com
IDR issues Letter of Findings on Use Tax on Pavers

In early October of 2016, the Indiana Department of Revenue (IDR) issued a Letter of Findings (Letter #04-20140555) relating to a proposed assessment of use tax on an Indiana paving company. Within this letter, the IDR clarified and affirmed its position regarding the taxability of machinery used to make improvements to realty and clarified its position on pavers specifically.  Pavers will no longer be treated as exempt from use tax, regardless of the exempt status of the person for whom work is performed. This determination is a direct shift of the IDR's position as stated within Information Bulletin 60, the previously issued guideline regarding such machinery.  Companies must now withhold use tax on the purchase of pavers--an unfortunate development for those considering such purchases going forward. While the paving company in the IDR's Letter of Findings had a favorable result to its challenge of the IDR's proposed assessment, other Indiana paving companies should also heed the unfavorable change that the letter contained.

For more information contact Aaron Wilzbacher, CPA at 800.880.7800 ext.1322 or email awilzbacher@hsccpa.com
ABOUT OUR CONSTRUCTION, REAL ESTATE AND MINERALS INDUSTRY

Because Harding, Shymanski & Company, P.S.C. is committed to providing quality service to our construction, real estate, and mineral industry 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 posses the drive and determination to help you manage your company on a proactive basis.
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"We continue to partner with HSC because of their great construction accounting and tax knowledge. Their sound advice is not only accurate, but it is very proactive. HSC staff are top notch and professional in every way."

- Don Seibert, President
Southwind Construction Corporation
Harding, Shymanski & Company, P.S.C.
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