RubinBrown’s Construction Group recently attended the AICPA’s Construction Industry Conference in Las Vegas, NV. The annual conference focused on instructive guidance for CPA’s in public practice, CFO’s, controllers and other construction industry specialists.
The conference opened with a thought-provoking presentation titled “Leading in Times of Better, Faster, Cheaper: There’s Upside Ahead.” Rusty Sherwood, senior consultant at FMI's Center for Strategic Leadership, led this discussion. He provided an industry update, focusing on the markets and opportunities to grow, particularly when companies are willing to explore and adapt. The presenter acknowledged that not only in the United States, but globally, construction and related companies number one challenge now and in the future is obtaining and retaining talent.
Following the opening keynote, specialized presentations filled the remainder of the first day. Several highlights include:
- Succession and Ownership Transfer Techniques – the session provided an overview of different equity transfer techniques and several case studies to illustrate situations and approaches.
- Accounting and Auditing of Joint Ventures – this session and content was timely as the industry continues to experience different creative ways for owners, contractors and stakeholders to manage risk. One such way is by utilizing multiple parties to execute projects. The session covered the various methods to report investments and related earnings in connection with joint ventures.
- Key Employee Retention: Strategy and Related Impact to Accounting and Cash Flow – this session focused on retaining key employees and explored strategies to do so, ranging from compensation mix and evaluation of benefits, to different equity sharing arrangements and other considerations.
- Homebuilder Accounting – this session also proved timely in consideration of the resurgence many regions across the country have seen in residential construction. The session addressed accounting and reporting considerations in the residential construction arena. For example, the presenter explored points to consider in accounting and reporting related to the upcoming changes in revenue recognition. Most education in construction recently has focused on impacts of the changed rules to commercial contractors, thus this proved to be an interesting viewpoint. Specifically, one of the considerations was identification and allocation of performance obligations. For example, the presentation considered community costs and other amenities offered by homebuilders and whether or not these items would be reported as separate performance obligations under the new standard and what impact would this have on revenues and profitability in different stages of a community development.
The conference’s second day continued with various specialized solution sessions. Multiple highlights from the second day of the conference include:
- Tax Extenders and Benefit to the Construction Industry – the session examined important proposed bills to renew certain tax breaks that are popular for businesses and their owners. The presentation illustrated how the legislation could significantly benefit construction and related companies.
- Key Metrics & Dashboarding – this session presented an overview of different key performance indicators, metrics and analysis utilized by the construction industry. Furthermore, the presentation considered the different KPI’s and utilizing analysis to come up with a useful dashboard for business owners.
- Revenue Recognition and Other A&A Developments – this session was well attended as practitioners, CFO’s, controllers and others gathered to listen to the latest updates and education surrounding future revenue recognition changes and other accounting and auditing topics. The presentation was tailored to focus on the impact to the construction industry and included several examples to interpret different applications of some of the new principles. The presentation explained that the Financial Accounting Standards Board (FASB) is currently investigating challenges with implementation by companies and speculated that this could lead to a delay in required implementation. Additionally, the presenters touched briefly on relevant changes impacted by new private company financial reporting rules and an update on the lease project.
RubinBrown’s Construction Group will continue to be active in the construction industry and work to identify relevant topics to be shared with you. Please contact your RubinBrown advisor with any questions.
Any federal tax advice contained in this communication (including any attachments): (i) is intended for your use only; (ii) is based on the accuracy and completeness of the facts you have provided us; and (iii) may not be relied upon to avoid penalties.
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