2021-052A - Laserfiche WebLink

Home Browse Search

(1) DICKERSON FLORIDA, 'INC. (A Wholly-owned Subsidiary of The Dickerson Group, Inc.) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2019 and 2018. Summary of Significant Accounting Policies (c) Revenue Recognition (continued) costs and recoverable amounts may be required in future reporting periods to reflect changes in estimates or final agreements with customers. Change orders that are unapproved as to both price and scope are evaluated as claims. The Company considers claims to be amounts in excess of approved contract prices that it seeks to collect from its customers or others for customer --caused delays, errors in specifications and designs, contract terminations, change orders that are either in dispute .or are unapproved as to both scope and price, or other causes of unanticipated additional contract costs. Claims are included in the calculation. of revenue when realization is probable, and amounts can be reliably ,determined to the extent costs are incurred. To support these. requirements, the existence of the following items must be satisfied: (i) the contract or other evidence provides a legal basis for the claim; or a legal Opinion has been obtained, stating that under the circumstances there is a reasonable basis to support the claim; (ii) additional costs are caused by circumstances that were unforeseen at the contract date and are not the result of deficiencies in the contractor's performance; (iii) costs associated with the claim are identifiable or otherwise determinable and are reasonable in view of the work performed; and, (iv) the evidence supporting the claim is objective and verifiable, not based on management's feel for the situation or on unsupported representations. .Revenue in excess of contract costs incurred on claims is recognized when an agreement is reached with customers as to the value of. the claims, which .in some instances may not occur until after completion of work under the contract. Costs associated with claims are included in the estimated costs to complete the contracts and are treated as project costs when incurred. (continued.) (10)