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Opening Request for Qualifications - SB Pinhook WTP Guaranteed Savings Contract - Reynolds Construction
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Opening Request for Qualifications - SB Pinhook WTP Guaranteed Savings Contract - Reynolds Construction
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10/14/2020 1:08:04 PM
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10/14/2020 1:07:51 PM
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Board of Public Works
Document Type
Contracts
Document Date
10/13/2020
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Reynolds Construction, LLC <br />Notes to Financial Statements <br />December 31, 2019 and 2018 <br />Self Insurance <br />The Company has elected to self-insure certain costs related to employee health and accident <br />benefit programs. Costs resulting from noninsured losses are charged to income when incurred. <br />The Company has purchased insurance that limits its exposure for individual claims to $125,000 <br />and that limits its aggregate exposure to $1,936,339. <br />Future Change in Accounting Principle <br />Accounting for Leases <br />FASB amended its standard related to the accounting for leases. Under the new standard, <br />lessees will now be required to recognize substantially all leases on the balance sheet as both a <br />right-of-use asset and a liability. The standard has two types of leases for income statement <br />recognition purposes: operating leases and finance leases. Operating leases will result in the <br />recognition of a single lease expense on a straight-line basis over the lease term similar to the <br />treatment for operating leases under existing standards. Finance leases will result in an <br />accelerated expense similar to the accounting for capital leases under existing standards. The <br />determination of lease classification as operating or finance will be done in a manner similar to <br />existing standards. The new standard also contains amended guidance regarding the <br />identification of embedded leases in service contracts and the identification or lease and <br />nonlease components in an arrangement. The new standard is effective for annual periods <br />beginning after December 15, 2020. The Company is evaluating the impact the standard will <br />have on the financial statements; however, the standard is expected to have a material impact on <br />the financial statements due to the recognition of additional assets and liabilities for operating <br />leases. <br />Note 2: Revenue From Contracts With Customers <br />Change in Accounting Principle <br />In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards <br />Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), that replaces <br />existing revenue recognition guidance. The new standard requires companies to recognize revenue <br />in a way that depicts the transfer of promised goods or services to customers in an amount that <br />reflects the consideration to which the entity expects to be entitled in exchange for those goods or <br />services. In addition, Topic 606 requires disclosures of the nature, amount, timing and uncertainty <br />of revenue and cash flows arising from contracts with customers. <br />The Company adopted this standard on January 1, 2019, using a modified retrospective approach. <br />Comparative prior period information has not been adjusted and continues to be reported in <br />accordance with previous revenue recognition guidance in ASC Topic 605-35, Construction-Type <br />and Production-Type Contracts. The Company has applied the new standard to all contracts not <br />complete at the date of adoption. <br />10 <br /> <br />
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