2017-059C - Laserfiche WebLink

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Advanced Roofing, Inc. and Affiliates Notes to Consolidated Financial Statements Note 1. Nature of Business and Significant Accounting Policies (Continued) Contract costs include all direct material and labor costs and those indirect costs related to contract performance, such as labor, supplies, equipment rental, subcontractors and repairs. Selling, general and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions and estimated profitability, including those arising from contract penalty provisions, and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. Profit incentives are included in revenue when their realization is reasonably assured. An amount equal to contract costs attributable to claims is included in revenue when realization is probable and the amount can be reliably estimated. The asset "costs and estimated earnings in excess of billings on uncompleted contracts" represents revenues recognized in excess of amounts billed. The liability "billings in excess of costs and estimated earnings on uncompleted contracts" represents billings in excess of revenues recognized. Service revenue: Service revenue is recognized when the service is performed. Solar panel revenue: Revenue from solar panel sales is recognized upon shipment to the customer. Cash and cash equivalents: For purposes of the statement of cash flows, the Company considers highly liquid short-term investments with maturities of approximately three months or less as of the date of purchase to be cash equivalents. The Company maintains its cash and cash equivalents in bank deposit accounts which, at times, may exceed federally -insured limits. The Company has not experienced any losses in such accounts. Accounts receivable: Accounts receivable are carried at the original charge amount, less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. An account receivable is considered to be past due if any portion of the receivable balance is outstanding for more than 30 days. In accordance with industry practice, contract receivables included retainages (holdbacks). Inventory: Inventory consists of solar panels and other related inventory as well as construction materials and supplies that have not been assigned or charged to specific contracts and are stated at the lower of cost (first -in, first -out basis) or market. Property and equipment; Property and equipment is carried at cost and depreciation is provided using the straight-line method over the following estimated useful lives: Years Buildings and improvements 5-39 Equipment 5-7 Vehicles 5-7 Furniture and fixtures 5-7 �9