Client Profile

Industry: Construction
Annual Revenue: >$1 billion
Geographic Footprint: National
Ownership Structure: Wholly Owned Subsidiary of a Public Company

Machinery moving dirtIssue

A construction company received a request from its parent company to evaluate the impact
of adopting the new revenue recognition standard. The parent company needed the analysis
in advance of its 2017 10-K filing to ensure it included adequate disclosures and to meet the
requirements of its Big Four auditor.


Working with the construction company, we identified some of the more complex, long-term
arrangements for analysis. We applied the new revenue recognition model to those contracts,
which required extensive evaluation of variable consideration, warranties, performance
obligations, and other provisions with specific guidance under the standard.
We also created tools to assist with the evaluation of the remaining contracts. Our team
supplied models for applying the revenue recognition standard to the different types of
contracts the construction company had and assisted with the creation of an accounting
policy whitepaper to substantiate the company’s conclusions about the application of the
new standard.


The construction company used our analysis to present a supportable, and timely picture of
the impact revenue recognition would have on its operation. Its adoption effort satisfied the
parent company’s auditors and provided valuable insight into how the new standard would
affect consolidated reporting.

Published on April 25, 2019