2021-207A - Laserfiche WebLink

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FERREIRA CONSTRUCTION COMPANY INC., AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Operating Cycle - Assets and liabilities related to long-term contracts are included in current assets and current liabilities in the accompanying balance sheet, as they will be liquidated in the normal course of contract completion, although this may require more than one year. Contract Receivables - Contract receivables are recorded when billed based upon contracted prices. Management periodically reviews the outstanding contract receivables and writes off amounts deemed to be uncollectible. An allowance for uncollectible contract receivables is recorded based on the financial condition of the specific customer, historical experiences and with consideration of specific receivables that management believes may not be collectible. Management has determined that an allowance for doubtful accounts of $243,600 is necessary at December 31, 2020 for contract receivables billed. Management continues to pursue collection for these accounts receivable through legal and other means. Deferred Financing Costs - Costs relating to refinancing the Company's term loans and line of credit are netted against the related long-term debt and amortized over the term of the related debt. Accumulated amortization at December 31, 2020 was $76,156. Amortization of deferred financing costs charged to interest expense was $206,675 for the year ended December 31, 2020. Joint Ventures - The Company has interests at December 31, 2020 in four joint ventures, which were formed to perform construction work on specific contracts. At December 31, 2020, the work under one joint venture is substantially complete, one joint venture is pursuing new work, while the other two are in progress. The joint ventures are organized as partnerships. The Company's ownership in these joint ventures is generally 50%. The Company accounts for the joint ventures using the equity/proportional consolidation method. Under this method, the investment is reflected as a line item in the balance sheet (Investment in joint venture) and the Company's proportional share of revenues and costs is included in each category in the statement of income. Investments on the Equity Method - Investments on the equity method are accounted for at acquisition cost adjusted by distributions and changes in earnings of the Company's share of the equity investment. Investments at Cost - The Company's investments consist of preferred stock which is carried at its cost basis, as there are not active markets for these securities. Management has determined that it is not practicable to estimate fair value of its investments. Investments that are valued at cost are adjusted when there is either observable price changes or impairments. There were no observable price changes as of December 31, 2020. An impairment loss was recorded during the year ended December 31, 2020, see Note 4. Property and Equipment - Property and equipment are stated at cost. Cost of repairs and maintenance are charged to expense as incurred and improvements are capitalized. Depreciation is provided using the straight-line method over the estimated useful lives of the related assets which range from 3 to 40 years. Long -Lived Assets - The Company evaluates all long-lived assets for impairment. Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. If the carrying value is not fully recoverable, an impairment loss is recognized to reduce the carrying amount to fair value, and is charged to expense in the period of impairment. At December 31, 2020, management has determined these assets are not impaired. Paycheck Protection Progrann ("PPP'9 Loan - The Company's policy is to account for the PPP loan as deferred revenue. The Company has met the criteria to account for the loan as deferred revenue and has recorded the amount net of costs of construction and general and administrative expenses on a systematic basis over the period in which the Company incurred eligible expenses under the Coronavirus Aid, Relief, and Economic Security Act ("CARES") act. As of December 31, 2020, the Company amortized $539,300, through a reduction of costs of construction for $269,650 and a reduction of general and administrative expenses