Hot Topics in Construction Accounting

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It’s been a long, tough haul for the construction industry. Extended slowdowns in home sales and construction have taken their toll, and other factors — banks’ debt exposure, stock market volatility, national and foreign politics — have just exacerbated the problem.

The good news is that in some places the industry may have hit bottom. In California’s Silicon Valley, for example, the most recent quarter’s growth resulting from new construction recorded a small improvement over historic lows in 2010.

CPE Link instructor Rebecca Ogle teaches on the latest, hottest topics on that front. For example, Ogle says, joint ventures and investments in entities other than subsidiaries will generally use one of three methods of accounting. Ogle teaches which of them — equity method, cost method, or fair value method — should be used when, and why.

An Accounting Standards Update was issued in June to “improve comparability, consistency and transparency,” Ogle says, and explains the other reasons as well.

She also teaches the fine points of multi-employer plans in which “two or more unrelated employers contribute, usually pursuant to one or more collective bargaining agreements.”

The construction industry touches nearly every other business realm, and its participants are numerous: contractors, commercial project owners, residential developers, subcontractors, architects and engineers, lenders and surety companies, to name a few.

With all the problems faced in day-to-day business dealings, it’s more important than ever to be on top of the very latest in accounting and tax changes for the construction industry.

Ogle is a principal in the construction and A/E team at Somerset CPAs. She provides clients with audit and tax expertise that she has gained during her 10 years in public accounting. She received the “Five Under 35” award from the Indiana CPA Society in 2006.

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