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Managing the IRS Repair Regulations and the Ongoing Challenges Presented After Initial Implementation

The IRS final “repair regulations,” effective January 1, 2014, completely revamped the way taxpayers evaluate expenditures in order to determine whether certain costs represent immediately deductible repair expenses, or capital improvements that must be depreciated over time. In addition, regulations issued in Section 1.162-3 provide new guidance on when a taxpayer may deduct costs incurred to acquire materials, supplies, repairs, and maintenance. The repair regulations present new risks and opportunities... continue reading

The Construction Work-In-Process (WIP) Is A Strategic Tool, Not Simply A Compliance Schedule

WIP monitors key performance indicators & reveals trends affecting profitability. For contractors, the Work-In-Process (WIP) schedule is part of a fundamental dashboard used to determine revenues and gross profit that should be included in your regular, monthly reporting package. The WIP schedule provides a snapshot at a point in time of where your profitability stands on a job-by-job basis, and can provide assurance that your contract revenue, contract costs, underbillings, and... continue reading

Ready-Access to True Costs Will Guide Profitability

In construction, there is the phrase: “costs drive revenue,” meaning that the driver behind how you recognize revenue is your costs.  Owners, estimators, project managers and accounting staff all need to fully comprehend a company’s true cost structure to clearly understand their financial position.  This information needs to be presented to the appropriate people (management) in a timely manner so important business decisions can be made. These financial metrics and... continue reading