Opening of Bids - High Street Sidewalk Improvements Proj No. 123-012 - Selge Construction

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Selge Construction Company, Inc. Notes to Financial Statements Note 1. Nature of Business and Significant Accounting Policies (Continued) Depreciation of property and equipment is computed principally by the straight-line method over the estimated useful lives of the related assets as follows: Years Buildings and improvements 5-39 Construction equipment 5-15 Automotive and trucks 5-7 Office equipment 3-10 Long-lived assets: In accordance with accounting standards, the Company reviews its long-lived assets periodically to determine potential impairment by comparing the value of the long-lived assets with the estimated future net undiscounted cash flows expected to result from the use of the assets, including cash flows from disposition. Should the sum of the expected future net cash flows be less than the carrying value of the related asset, the Company would recognize an impairment loss at that date. An impairment loss would be measured by comparing the amount by which the carrying value exceeds the fair value of the long-lived assets. During the years ended February 28, 2023 and 2022, the Company determined that no impairment loss was necessary. Revenue recognition: The Company utilizes the percentage of completion method for reporting revenue on the majority of its construction contracts. Under this method, revenue is recognized based on the Company's estimate of job completion. See Note 2 for further information on the Company's revenue recognition. Income taxes: The Company, with the consent of its stockholders, has elected to have its income taxed under Section 1362 of the Internal Revenue Code and a similar section of the state tax laws which provide that, in lieu of corporation income taxes, the stockholders account for their proportionate share of the Company's items of income, deduction, losses and credits. It is the Company's intent to make distributions to stockholders for their individual income tax liabilities relating from the Company's income. Management has evaluated the Company's tax positions and concluded that the Company has taken no uncertain tax positions that require adjustment to the financial statements to comply with the provisions of accounting guidance for uncertainty in income taxes The Company files income tax returns in the U.S. federal, Indiana and Michigan jurisdictions. With few exceptions, the Company is no longer subject to tax examinations by the U.S. federal, state, or local tax authorities for years before the Company's fiscal and tax year end of February 29, 2020. The Company is required at times to make federal tax deposits in order to retain its fiscal year end. The federal tax deposit of approximately $798,000 and $571,000 at February 28, 2023 and 2022, respectively, is reflected as a long-term asset in the Company's accompanying balance sheets.