Lease Accounting: 5 Critical Factors for Successful Implementation
 
Accounting Standard Codification Topic (ASC) 842, Leases (the "new standard"), is a significant change to current lease accounting. It goes into effect on January 1, 2019 for calendar year-end public business entities and January 1, 2020 for calendar year non-public business entities.
 
The new standard requires lessees to recognize most leases on their balance sheet, which will create numerous risk factors that will require a proactive approach to ensure compliance and accuracy of reporting. Making this situation more complicated is the fact that companies will also have to adopt ASC 606, Revenue from contracts with customers (the "new revenue standard") in the year prior to the effective date of the new lease standard. Critical factors to consider as your entity implements the standard can including:
  • Engaging stakeholders from across the entity to avoid any disruptions to company operations.
  • Identifying leases across the company and considering what constitutes a lease.
  • The impact on your company's IT systems (including processes and controls).
  • Significant judgements to be considered.
  • Financial statement impacts.
To learn more about how this standard could affect your business, see the full article here.
Significant Changes to IRS Audits of Partnerships
 
The IRS will soon be following new guidelines relating to their audits of partnerships and limited liability companies (LLC's). These new rules generally affect returns filed after 2017, but it may be beneficial for existing entities to consider changing their partnership or LLC agreements now to avoid the negative consequences of the changes.
 
One consequence of the rules change is the creation of the term "partnership representative" that replaces the "tax matters partner." The partnership representative will be the single point of contact with the IRS and the partnership, and fully capable of binding the entity to any agreements or negotiations with the IRS. This representative should be carefully selected and specified in an entity's partnership agreement.
 
Click here to read the full article. For additional information, please contact Paul Esche, CPA, CCIFP, CCA or Greg Elpers, CPA, CCA at 800.880.7800.
BLS Finds Productivity Gains in Construction; Full-year PPI Rise is Highest Since 2013

Overall productivity growth has increased for three industries in construction: single family residential construction, multi-family residential construction, and industrial construction. Highways, roads and bridges construction saw decreased growth. PPI (Producer Price Index) for final demand (goods, services, and five types of nonresidential buildings that make up 34% of total construction) rose 3.0% year-over-year, compared to .5% in 2016.

The PPI for subcontractor work also saw an increase since 2016. For example, the PPI for roofing subcontractors rose 1.9%, while electrical contractors saw a year-over-year increase of 3.7%. PPI for inputs to construction goods rose 5.0% in 2017, the largest in six years. The index for inputs to construction services increased 4.2% for the year. Materials important to construction also saw notable increases in prices year-over-year.

At the end of November 2017, job openings in construction increased by 32,000 up to 210,000 openings (the largest number for November since monitoring of the statistic began in 2000). The industry saw 117,000 workers quit and 256,000 were hired in November. In early January, there were more than 550,000 unemployed job seekers whose last job was in construction, the lowest in at least 17 years. This indicates that employers are looking to hire new employees, but are generally having difficulty finding and keeping qualified candidates. To read the full article, click here.    
2018 Ohio Valley Construction Market Outlook Survey coming soon!

As we prepare to launch our third annual Ohio Valley Construction Market Survey, our goal is to make the report as valuable, relevant, and industry-leading as possible. With that in mind, please email us to let us know if you have specific topics you would like us to address in the survey.
UPCOMING EVENTS
 
March, July and November

2018 ESOP Roundtable Schedule

We are proud to host ESOP Roundtable events for ESOP companies and those companies who are exploring the ESOP opportunity. As you might expect, the ESOP Roundtable agenda is member-driven and provides a place to share experiences, questions, best practices, lessons learned and successes. 
ABOUT OUR CONSTRUCTION, REAL ESTATE AND MINERALS INDUSTRY TEAM 

Because Harding, Shymanski & Company, P.S.C. is committed to providing quality service to our construction, real estate, and mineral industry clients, we have selected a team of dedicated professionals to serve as your industry's consultants. These individuals understand the language and key issues unique to your industry and possess the drive and determination to help you manage your company on a proactive basis.
SEE WHAT OUR CLIENTS ARE SAYING...

Harding, Shymanski & Company has been a true partner in the success of our business. We appreciate how they take the time to understand our business in order to provide solutions tailored to fit our unique needs. They also are proactive in sharing industry trends and news that have a positive impact for us financially. If you are looking for a professional, trustworthy partner with a high level of expertise, Harding, Shymanski & Company is the place to go.
 
Jeff Justice, President
Hafer PSC 

Disclaimer: The information contained in this email is for general guidance on matters of interest only. The publication does not, and is not intended to provide legal, tax or accounting advice.
Harding, Shymanski & Company, P.S.C.
800.880.7800  |  [email protected]  |  www.hsccpa.com 
STAY CONNECTED:

View our profile on LinkedIn