CICPAC

SECURE 2.0 Act represents a significant shift in retirement plan legislation, impacting various sectors, including the construction industry. Understanding these changes is crucial for CPAs and consultants specializing in construction finance, particularly for those working with prevailing wage contractors. In this article, we'll delve into the implications of SECURE 2.0 for Prevailing wage contractors and the benefits of this new legislation.

What is SECURE 2.0?

The SECURE 2.0 Act, short for Setting Every Community Up for Retirement Enhancement Act 2.0, builds on the original SECURE Act passed in 2019. The goal of SECURE 2.0 is to further improve retirement security for American workers by increasing access to retirement plans, boosting retirement savings, and simplifying plan administration. Key provisions include:
  • Increased automatic enrollment.
  • Higher catch-up contribution limits.
  • Incentives for small businesses to establish retirement plans.

Prevailing Wage Contractors: An Overview

Prevailing wage laws mandate that contractors working on federally funded or assisted construction projects pay their laborers and mechanics no less than the locally prevailing wages and benefits paid on similar projects, and in some states, prevailing wage laws also extend to state and locally-funded projects. These laws ensure fair compensation and help maintain a level playing field in the industry.

The Impact of SECURE 2.0 on Prevailing Wage Contractors

Enhanced Retirement Plan Access One crucial aspect of SECURE 2.0 is to expand access to retirement plans. Expanded access presents an excellent opportunity for prevailing wage contractors to offer attractive retirement benefits, making it easier to attract and retain employees. The new legislation aims to simplify the process of establishing and managing retirement plans by reducing administrative burdens and providing increased tax incentives. Increased Contribution Limits SECURE 2.0 introduces higher catch-up contribution limits for workers aged 60 and above. This change can benefit older employees in the construction industry who are looking to bolster their retirement savings as they approach retirement age. Contractors will need to update their benefits packages to align with these new limits, ensuring compliance and maximizing the benefits for their employees. Tax Incentives and Credits The Act provides enhanced tax credits for small businesses that establish new retirement plans or enhance existing ones. For prevailing wage contractors, these incentives can offset the costs associated with upgrading their benefits packages to comply with prevailing wage requirements. Fringe contributions to a retirement plan are also eligible for up to $1,000/employee in tax credits for new plans. CPAs and consultants should advise their clients on effectively leveraging these credits. Automatic Enrollment and Escalation SECURE 2.0 requires new retirement plans to enroll and escalate employee contributions automatically. For contractors, this means updating their payroll systems and employee onboarding processes. Automatic enrollment helps increase employee participation rates, ensuring that more workers benefit from retirement savings plans. Compliance and Reporting Prevailing wage contractors must stay vigilant about compliance with both prevailing wage laws and the new SECURE 2.0 provisions. This can be complex, requiring meticulous record-keeping and reporting. CPAs and consultants should emphasize the importance of maintaining accurate records and staying updated with the latest regulatory changes. SECURE 2.0 Act brings significant changes that can positively impact prevailing wage contractors and their employees. By understanding and adapting to these changes, contractors can elevate their benefits packages, ensure compliance, and ultimately provide better financial security for their workforce. CPAs and consultants specializing in construction finance play an essential role in guiding their clients through this transition, unlocking new opportunities, and expertly navigating the complexities of the new legislation, positioning themselves as indispensable partners in this exciting phase of development. If you have questions about prevailing wage or prevailing wage benefits, please visit beneco.com or call Sales Director Jason Sperfslage at (563) 920-4066 to learn more.  " target="_blank">Understanding SECURE 2.0 and Its Impact on Prevailing Wage Contractors

The SECURE 2.0 Act represents a significant shift in retirement plan legislation, impacting various sectors, including the construction industry. Understanding these changes is crucial for [...]

By |2024-06-12T11:22:39-05:00June 12th, 2024|AM Whitepaper, CICPAC, Construction|

Learn more about Pronovos Construction Financial Intelligence Constructing a solid foundation for financial success requires more than intuition; it demands data-driven decisions backed by key performance indicators (KPls). In the complex realm of construction, CEOs and Presidents rely on these metrics to navigate strategic paths with precision. Our checklist serves as a compass, illuminating crucial KPls from fundamental financial ratios to intricate cash flow metrics like days sales outstanding. By leveraging this invaluable resource,  leaders can pinpoint areas for improvement, measure progress, and capitalize on strengths, ultimately steering their companies toward sustained growth and prosperity. Understanding these metrics empowers construction executives, including Presidents, VPs, and Financial Managers, to make informed decisions that drive  success. By incorporating KPI tracking strategies into their arsenal, leaders can enhance their ability to monitor project performance effectively. Moreover, every  listed KPI in this checklist is accessible within ProNovos to facilitate streamlined analysis and maximize the utilization of critical financial data. Embracing this educational approach to KPI monitoring equips construction professionals with the tools needed to navigate challenges and achieve sustainable growth in the industry. eBook sections:
  • What are KPIs?
  • Why you need KPIs
  • Internal Benchmarking
  • KPIs to track
[/fusion_text][fusion_button link="https://cicpac.com/wp-content/uploads/2024/04/Construction-Financial-KPI-Checklist-Executive-Edition.pdf" title="" target="_blank" link_attributes="" alignment_medium="" alignment_small="" alignment="center" modal="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" sticky_display="normal,sticky" class="" id="" color="default" button_gradient_top_color_hover="" hue="" saturation="" lightness="" alpha="" button_gradient_top_color="" button_gradient_bottom_color_hover="" button_gradient_bottom_color="" gradient_start_position="" gradient_end_position="" gradient_type="" radial_direction="" linear_angle="180" accent_hover_color="" accent_color="" type="" bevel_color="" bevel_color_hover="" border_top="" border_right="" border_bottom="" border_left="" border_radius_top_left="" border_radius_top_right="" border_radius_bottom_right="" border_radius_bottom_left="" border_hover_color="" border_color="" size="" padding_top="" padding_right="" padding_bottom="" padding_left="" fusion_font_family_button_font="" fusion_font_variant_button_font="" font_size="" line_height="" letter_spacing="" text_transform="" stretch="default" margin_top="" margin_right="" margin_bottom="" margin_left="" icon="" icon_position="left" icon_divider="no" hover_transition="none" animation_type="" animation_direction="left" animation_color="" animation_speed="0.3" animation_delay="0" animation_offset=""]Download eBook[/fusion_button][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]" target="_blank">Construction Financial Executive KPI Checklist

Learn more about Pronovos Construction Financial Intelligence Constructing a solid foundation for financial success requires more than intuition; it demands data-driven decisions backed by [...]

By |2024-04-22T09:24:39-05:00April 22nd, 2024|AM Whitepaper, CICPAC, Construction|

  • The benefits of a Tech Stack
  • Understanding software integration
  • Ways to find software that communicates well
  • Well-paired tech stacks save time and money. [/fusion_text][fusion_button link="https://www.foundationsoft.com/learn/the-best-construction-software-tech-stack-for-your-business/?&utm_source=cfma&utm_medium=referral&utm_campaign=ref-sus-cicpac-blog-q2-apr-2024" title="" target="_blank" link_attributes="" alignment_medium="" alignment_small="" alignment="" modal="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" sticky_display="normal,sticky" class="" id="" color="default" button_gradient_top_color_hover="" hue="" saturation="" lightness="" alpha="" button_gradient_top_color="" button_gradient_bottom_color_hover="" button_gradient_bottom_color="" gradient_start_position="" gradient_end_position="" gradient_type="" radial_direction="" linear_angle="180" accent_hover_color="" accent_color="" type="" bevel_color="" bevel_color_hover="" border_top="" border_right="" border_bottom="" border_left="" border_radius_top_left="" border_radius_top_right="" border_radius_bottom_right="" border_radius_bottom_left="" border_hover_color="" border_color="" size="" padding_top="" padding_right="" padding_bottom="" padding_left="" fusion_font_family_button_font="" fusion_font_variant_button_font="" font_size="" line_height="" letter_spacing="" text_transform="" stretch="default" margin_top="" margin_right="" margin_bottom="" margin_left="" icon="" icon_position="left" icon_divider="no" hover_transition="none" animation_type="" animation_direction="left" animation_color="" animation_speed="0.3" animation_delay="0" animation_offset=""]Continue Reading[/fusion_button][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]" target="_blank">Building an Optimal Tech Stack for Your Business

    A tech stack is a cohesive group of software that seamlessly communicates with each other to modernize operations. Your construction clients can use a [...]

    By |2024-04-22T09:26:57-05:00April 20th, 2024|AM Whitepaper, CICPAC, Construction|

    As construction companies explore different ways to keep costs low, more and more contractors are turning to job costing.

    Efficient job costing can lead to improved profitability, enhanced data transparency and better expense tracking. With job costing, contractors are always aware of how much money is moving throughout the project, but implementing a job cost structure can be confusing. That’s why Foundation Software created The Ultimate Guide to Job Costing — an article filled with insights on effective job costing strategies. This article includes details about:
    • How a job cost system tracks spending
    • The different types of job cost reports
    • How to test the effectiveness of your job cost structure
    • How to utilize cost codes
    Profitable construction jobs are the product of well-managed cost systems. Continue reading to see all the benefits of a construction job cost accounting system. [/fusion_text][fusion_button link="https://www.foundationsoft.com/learn/the-ultimate-guide-to-construction-job-costing/" title="" target="_blank" link_attributes="" alignment_medium="" alignment_small="" alignment="" modal="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" sticky_display="normal,sticky" class="" id="" color="default" button_gradient_top_color_hover="" hue="" saturation="" lightness="" alpha="" button_gradient_top_color="" button_gradient_bottom_color_hover="" button_gradient_bottom_color="" gradient_start_position="" gradient_end_position="" gradient_type="" radial_direction="" linear_angle="180" accent_hover_color="" accent_color="" type="" bevel_color="" bevel_color_hover="" border_top="" border_right="" border_bottom="" border_left="" border_radius_top_left="" border_radius_top_right="" border_radius_bottom_right="" border_radius_bottom_left="" border_hover_color="" border_color="" size="" padding_top="" padding_right="" padding_bottom="" padding_left="" fusion_font_family_button_font="" fusion_font_variant_button_font="" font_size="" line_height="" letter_spacing="" text_transform="" stretch="default" margin_top="" margin_right="" margin_bottom="" margin_left="" icon="" icon_position="left" icon_divider="no" hover_transition="none" animation_type="" animation_direction="left" animation_color="" animation_speed="0.3" animation_delay="0" animation_offset=""]Continue Reading[/fusion_button][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]" target="_blank">The Ultimate Guide to Construction Job Costing

    As construction companies explore different ways to keep costs low, more and more contractors are turning to job costing. Efficient job costing can lead [...]

    By |2024-04-22T09:24:41-05:00February 14th, 2024|AM Whitepaper, CICPAC, Construction|

    "In construction, you are continually trying to strike the right balance in so many areas — from crews and equipment, to bids, billings, and job costs. Because they are so important, you want to make those predictive calls based on the story being told by your data, without overly relying on gut feelings and rearview-mirror information, which has been the historical norm." - Bruce Orr, CEO at ProNovos

    [/fusion_text][fusion_text columns="" column_min_width="" column_spacing="" rule_style="" rule_size="" rule_color="" hue="" saturation="" lightness="" alpha="" content_alignment_medium="" content_alignment_small="" content_alignment="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" sticky_display="normal,sticky" class="" id="" margin_top="" margin_right="" margin_bottom="" margin_left="" fusion_font_family_text_font="" fusion_font_variant_text_font="" font_size="" line_height="" letter_spacing="1.25" text_transform="" text_color="" animation_type="" animation_direction="left" animation_color="" animation_speed="0.3" animation_delay="0" animation_offset="" logics=""]

    Explore essential financial concepts and gain insights from industry experts in this eBook, covering job costing, project forecasting, change order management, revenue recognition, billings, and project-level cash flow.

    Inside this eBook, you will discover:

    • Simplified Financial Wisdom: A breakdown of intricate financial concepts into easy-to-digest insights, empowering you to excel in a project’s financial management
    • Expert Insights: Hear from industry experts, including project managers, financial advisors and construction business owners
    • Financial Mastery: Build a solid foundation for cash flow management and profitability
      Advanced Strategies: Discover methodologies and tools to optimize profitability across projects

    [/fusion_text][fusion_button link="https://cicpac.com/wp-content/uploads/2023/11/ConMgrGuidetoFinance-1.pdf" title="" target="_blank" link_attributes="" alignment_medium="" alignment_small="" alignment="center" modal="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" sticky_display="normal,sticky" class="" id="" color="default" button_gradient_top_color_hover="" hue="" saturation="" lightness="" alpha="" button_gradient_top_color="" button_gradient_bottom_color_hover="" button_gradient_bottom_color="" gradient_start_position="" gradient_end_position="" gradient_type="" radial_direction="" linear_angle="180" accent_hover_color="" accent_color="" type="" bevel_color="" bevel_color_hover="" border_top="" border_right="" border_bottom="" border_left="" border_radius_top_left="" border_radius_top_right="" border_radius_bottom_right="" border_radius_bottom_left="" border_hover_color="" border_color="" size="" padding_top="" padding_right="" padding_bottom="" padding_left="" fusion_font_family_button_font="" fusion_font_variant_button_font="" font_size="" line_height="" letter_spacing="" text_transform="" stretch="default" margin_top="4%" margin_right="" margin_bottom="4%" margin_left="" icon="fa-arrow-alt-circle-down fas" icon_position="right" icon_divider="no" hover_transition="none" animation_type="" animation_direction="left" animation_color="" animation_speed="0.3" animation_delay="0" animation_offset=""]Download eBook[/fusion_button][/fusion_builder_column][fusion_builder_column type="1_4" layout="1_4" align_self="auto" content_layout="column" align_content="flex-start" valign_content="flex-start" content_wrap="wrap" spacing="" center_content="no" column_tag="div" link="" target="_self" link_description="" min_height="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" sticky_display="normal,sticky" class="" id="" type_medium="" type_small="" flex_grow_medium="" flex_grow_small="" flex_grow="" flex_shrink_medium="" flex_shrink_small="" flex_shrink="" order_medium="0" order_small="0" dimension_spacing_medium="" dimension_spacing_small="" dimension_spacing="" dimension_margin_medium="" dimension_margin_small="" margin_top="" margin_bottom="" padding_medium="" padding_small="" padding_top="" padding_right="" padding_bottom="" padding_left="" hover_type="none" border_sizes="" border_color_hover="" border_color="" border_style="solid" border_radius="" box_shadow="no" dimension_box_shadow="" box_shadow_blur="0" box_shadow_spread="0" box_shadow_color="" box_shadow_style="" z_index_hover="" z_index="" overflow="" background_type="single" gradient_start_color="" gradient_end_color="" gradient_start_position="0" gradient_end_position="100" gradient_type="linear" radial_direction="center center" linear_angle="180" background_color_medium="" background_color_small="" background_color_medium_hover="" background_color_small_hover="" background_color_hover="" background_color="" background_image_medium="" background_image_small="" background_image="" background_image_id_medium="" background_image_id_small="" background_image_id="" lazy_load="avada" skip_lazy_load="" background_position_medium="" background_position_small="" background_position="left top" background_repeat_medium="" background_repeat_small="" background_repeat="no-repeat" background_size_medium="" background_size_small="" background_size="" background_custom_size="" background_custom_size_medium="" background_custom_size_small="" background_blend_mode_medium="" background_blend_mode_small="" background_blend_mode="none" render_logics="" sticky="off" sticky_devices="small-visibility,medium-visibility,large-visibility" sticky_offset="" absolute="off" absolute_props="" filter_type="regular" filter_hover_element="self" filter_hue="0" filter_saturation="100" filter_brightness="100" filter_contrast="100" filter_invert="0" filter_sepia="0" filter_opacity="100" filter_blur="0" filter_hue_hover="0" filter_saturation_hover="100" filter_brightness_hover="100" filter_contrast_hover="100" filter_invert_hover="0" filter_sepia_hover="0" filter_opacity_hover="100" filter_blur_hover="0" transform_type="regular" transform_hover_element="self" transform_scale_x="1" transform_scale_y="1" transform_translate_x="0" transform_translate_y="0" transform_rotate="0" transform_skew_x="0" transform_skew_y="0" transform_scale_x_hover="1" transform_scale_y_hover="1" transform_translate_x_hover="0" transform_translate_y_hover="0" transform_rotate_hover="0" transform_skew_x_hover="0" transform_skew_y_hover="0" transform_origin="" transition_duration="300" transition_easing="ease" transition_custom_easing="" motion_effects="" scroll_motion_devices="small-visibility,medium-visibility,large-visibility" animation_type="" animation_direction="left" animation_color="" animation_speed="0.3" animation_delay="0" animation_offset="" last="true" border_position="all" first="false" spacing_left="1%"][fusion_imageframe image_id="7400|full" aspect_ratio="" custom_aspect_ratio="100" aspect_ratio_position="" skip_lazy_load="" lightbox="no" gallery_id="" lightbox_image="" lightbox_image_id="" alt="" link="" linktarget="_self" hide_on_mobile="small-visibility,medium-visibility,large-visibility" sticky_display="normal,sticky" class="" id="" max_width="" sticky_max_width="" align_medium="none" align_small="none" align="none" mask="" custom_mask="" mask_size="" mask_custom_size="" mask_position="" mask_custom_position="" mask_repeat="" style_type="" blur="" stylecolor="" hue="" saturation="" lightness="" alpha="" hover_type="none" magnify_full_img="" magnify_duration="120" scroll_height="100" scroll_speed="1" margin_top_medium="" margin_right_medium="" margin_bottom_medium="" margin_left_medium="" margin_top_small="" margin_right_small="" margin_bottom_small="" margin_left_small="" margin_top="" margin_right="" margin_bottom="" margin_left="" bordersize="" bordercolor="" borderradius="" z_index="" caption_style="off" caption_align_medium="none" caption_align_small="none" caption_align="none" caption_title="" caption_text="" caption_title_tag="2" fusion_font_family_caption_title_font="" fusion_font_variant_caption_title_font="" caption_title_size="" caption_title_line_height="" caption_title_letter_spacing="" caption_title_transform="" caption_title_color="" caption_background_color="" fusion_font_family_caption_text_font="" fusion_font_variant_caption_text_font="" caption_text_size="" caption_text_line_height="" caption_text_letter_spacing="" caption_text_transform="" caption_text_color="" caption_border_color="" caption_overlay_color="" caption_margin_top="" caption_margin_right="" caption_margin_bottom="" caption_margin_left="" animation_type="" animation_direction="left" animation_color="" animation_speed="0.3" animation_delay="0" animation_offset="" filter_hue="0" filter_saturation="100" filter_brightness="100" filter_contrast="100" filter_invert="0" filter_sepia="0" filter_opacity="100" filter_blur="0" filter_hue_hover="0" filter_saturation_hover="100" filter_brightness_hover="100" filter_contrast_hover="100" filter_invert_hover="0" filter_sepia_hover="0" filter_opacity_hover="100" filter_blur_hover="0"]https://cicpac.com/wp-content/uploads/2023/11/Cover_A-Construction-Managers-Guide-to-Project-Financials.jpg[/fusion_imageframe][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

    " target="_blank">A Construction Manager’s Guide to Project Financials

    "In construction, you are continually trying to strike the right balance in so many areas — from crews and equipment, to bids, billings, and [...]

    By |2023-11-10T13:12:33-05:00November 10th, 2023|AM Whitepaper, CICPAC, Construction|

    Abby Massey of Calvetti Ferguson (Tax Incentive Director from Houston, TX) for this recap from a recent CICPAC webinar. 

    The Inflation Reduction Act was passed in 2022 and introduced several energy efficient tax incentives. For most taxpayers and CPAs these incentives can seem complicated at first glance. So how do these incentives work and what is the best way for a taxpayer to ensure they can claim them? Below we will dive into two popular incentives, requirements for maximizing the value, and practical tips for identifying eligible projects.

    The Investment Tax Credit (ITC)

    The Investment Tax Credit is available to those who install qualified energy property, such as solar panels or geothermal heat pumps. The credit is a percentage of the qualified energy property basis, or 6% at the base rate. If the project meets prevailing wage & apprenticeship requirements or generates less than 1 MW of electricity, the credit increases to a bonus rate of 30%. Additional value (base = 2%/bonus = 10%) can be added on for meeting domestic content, energy community, or low-income community requirements. If a project meets all requirements, a maximum credit of 70% can be achieved.

    The Inflation Reduction Act also introduced new rules that allow government and tax-exempt entities to benefit from this tax incentive. These entities can claim the credit through the direct pay method, which would allow them to receive a check from the Treasury in the amount of the credit. In addition, these credits can be transferred or sold to eligible buyers.

    Energy Efficient Commercial Buildings Deduction (Section 179D)

    The Energy Efficient Commercial Buildings Deduction is a tax deduction available to those who install HVAC and hot water, interior lighting, or building envelope systems into new or existing commercial buildings. The Section 179D program is eligible for a base rate of $0.50 - $1.00 per square foot. If prevailing wage and apprenticeship requirements are met on the project, the deduction increases to $2.50 - $5.00 per square foot. The deduction amount is determined through an energy modeling analysis, which compares the building to a baseline standard as outlined in ASHRAE 90.1-2007. An alternative method was introduced by the IRA, which determines a deduction based on a before-and-after look of a building that underwent an energy-efficient retrofit.

    Section 179D is available to taxpayers who newly construct or renovate their existing properties. Architects, engineers, and contractors can also claim this deduction for work performed on government or tax-exempt buildings.

    Prevailing Wage & Apprenticeship Requirements

    Prevailing wage & apprenticeship requirements impact many of the incentives included in the Inflation Reduction Act. Complying with these requirements means significantly larger incentives. To comply, all laborers and mechanics employed by the taxpayer, or their contractors, must be paid prevailing wages in the location of the project. For the ITC, this includes alteration or repair projects that occur 5 years after the initial project.

    In addition, all eligible projects must participate in registered apprenticeship programs. A percentage of the total labor hours should be worked by qualified apprentices. The total apprentice labor hours in 2023 should equal 12.5% or more of the total hours. This percentage increases to 15% in 2024.

    It’s important to identify potential projects early to maximize the benefit from these incentives. Taxpayers and their CPAs should be discussing future plans to implement new construction or energy efficient projects. Cost segregation studies or clean energy loans, such as C-PACE, are good indicators that other incentives may be available to claim. Involve a trusted tax incentive specialist early who can further identify eligible projects and educate the team on the requirements. In the case of Section 179D other licensed individuals, such as a Professional Engineer, are required to certify the tax deduction. Having an experienced team of professionals will ensure a smooth and compliant tax incentive process.

    About the Author

    Abby Massey, Tax Incentives Director, Calvetti Ferguson

    Abby has more than 13 years of professional expertise, with six years dedicated to tax incentive consulting and seven years in engineering and commercial building design. She earned her Bachelor of Science in Civil Engineering from Purdue University and has experience collaborating with clients in various industries, including construction, building design, manufacturing, and energy. Abby specializes in energy-efficient commercial building tax incentives, Section 179D tax deductionsresearch and development tax credits, and cost segregation studies

    " target="_blank">Inflation Reduction Act Incentives

    Thanks to Abby Massey of Calvetti Ferguson (Tax Incentive Director from Houston, TX) for this recap from a recent CICPAC webinar.  The Inflation Reduction Act [...]

    By |2023-10-17T14:40:33-05:00October 17th, 2023|CICPAC, Construction|

    As published in ENR 10/2/23, authored by Mike Karlins, CPA, CRIS, Senior Client Advisor, American Global After years of discussion, revisions and a pandemic-induced delay, the Financial Accounting Standards Board (FASB) finally brought the new lease accounting rule, ASC 842 (Accounting Standards Codification 842), to the forefront. Prior to the implementation of ASC 842 (which became effective for private companies in years beginning after December 15, 2021), lease accounting required companies to classify leases as either operating or capital. Operating leases were not recorded on the balance sheet, which led to the potential understatement of a company’s liabilities and overstatement of its financial performance. ASC 842 aims to address those issues and achieve the four following objectives:
    • Increased Transparency: Under ASC 842, both operating leases and finance (capital) leases are required to be recognized on the balance sheet, enhancing transparency, and ensuring that financial statements more accurately reflect a company’s financial position and obligations.
    • Improved Comparability: The standard’s more consistent methodology provides a better framework for recognizing and measuring lease assets and liabilities, which allows stakeholders to better compare financial information across companies in the same industry.
    • Improved Risk Assessment: With a more comprehensive view of lease obligations, sureties can better assess a firm’s financial risk and its ability to handle lease-related expenses.
    • Enhanced Decision-Making: With lease obligations explicitly stated on the balance sheet, investors, creditors and other users of financial statements can make more informed decisions about a company’s financial health, its ability to meet future lease payments, its capacity to complete projects and its overall lease-related risk exposure.
    The question for the construction industry is, then, with these changes, do surety underwriters now view a contractor’s financial statements differently? After speaking with staff experts and several underwriters from the surety industry, the answer appears to be a resounding “no.” Many stated that footnotes to financial statements included future lease payments, therefore, surety underwriters were already including those figures in their analysis of short-term and long-term obligations. So, while for some industries the implementation of ASC 842 may have been significant, for contractors, the new lease accounting rules were a non-event, more optical than substantive. Sureties seem to have taken the position that there has been no change in the contractor’s business, so why should our underwriting change?

    About American Global

    American Global is one of the largest privately held insurance and surety brokerage firms in the U.S., specializing in all aspects of construction risk management. They support contractors, owners, and developers throughout the entire scope of their project and across every milestone of their business, protecting against the risks and exposures specific to the construction industry. American Global has multiple offices across the United States, as well as in Canada, England, and Italy, to serve clients throughout North America, Latin America, the United Kingdom and Europe. [/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]" target="_blank">New Lease Accounting Standard and the Impact on Surety Underwriting 

    As published in ENR 10/2/23, authored by Mike Karlins, CPA, CRIS, Senior Client Advisor, American Global After years of discussion, revisions and a pandemic-induced [...]

    By |2023-10-06T14:34:50-05:00October 6th, 2023|AM Whitepaper, CICPAC, Construction|

    Beginning on January 1, 2024, many companies in the United States will have to report information about their beneficial owners, i.e., the individuals who ultimately own or control the company. They will have to report the information to the Financial Crimes Enforcement Network (FinCEN).

    The National Law Review recently released an article regarding the 2024 Corporate Transparency Act. The article highlights the following:

    • The Corporate Transparency Act, will impose new significant reporting requirements for many U.S. companies starting in 2024
    • Many companies will be required to report and regularly update beneficial ownership information they may not currently possess
    • Companies will need to put in place policies and procedures and likely amend their governing documents to ensure compliance

    FinCEN has prepared a Frequently Asked Questions (FAQs) website page in response to inquiries received relating to the Beneficial Ownership Information Reporting Rule.

    [/fusion_text][fusion_button link="https://www.natlawreview.com/article/new-corporate-transparency-act-disclosure-requirements-set-2024" title="" target="_blank" link_attributes="" alignment_medium="" alignment_small="" alignment="center" modal="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" sticky_display="normal,sticky" class="" id="" color="default" button_gradient_top_color_hover="" hue="" saturation="" lightness="" alpha="" button_gradient_top_color="" button_gradient_bottom_color_hover="" button_gradient_bottom_color="" gradient_start_position="" gradient_end_position="" gradient_type="" radial_direction="" linear_angle="180" accent_hover_color="" accent_color="" type="" bevel_color="" bevel_color_hover="" border_top="" border_right="" border_bottom="" border_left="" border_radius_top_left="" border_radius_top_right="" border_radius_bottom_right="" border_radius_bottom_left="" border_hover_color="" border_color="" size="" padding_top="" padding_right="" padding_bottom="" padding_left="" fusion_font_family_button_font="" fusion_font_variant_button_font="" font_size="" line_height="" letter_spacing="" text_transform="" stretch="default" margin_top="" margin_right="" margin_bottom="" margin_left="" icon="" icon_position="left" icon_divider="no" hover_transition="none" animation_type="" animation_direction="left" animation_color="" animation_speed="0.3" animation_delay="0" animation_offset=""]Read the full article[/fusion_button][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

    " target="_blank">2024 Corporate Transparency Act

    Beginning on January 1, 2024, many companies in the United States will have to report information about their beneficial owners, i.e., the individuals who [...]

    By |2023-10-17T14:40:41-05:00September 28th, 2023|CICPAC, Resources|

    More than 60 issues are covered, including licensing, liens, notice requirements, pay if paid, prompt pay, and prevailing wages. AGC members save 25%. 

    [/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container][fusion_builder_container type="flex" hundred_percent="no" hundred_percent_height="no" min_height_medium="" min_height_small="" min_height="" hundred_percent_height_scroll="no" align_content="stretch" flex_align_items="flex-start" flex_justify_content="flex-start" flex_wrap_medium="" flex_wrap_small="" flex_wrap="wrap" flex_column_spacing="" hundred_percent_height_center_content="yes" equal_height_columns="no" container_tag="div" menu_anchor="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" status="published" publish_date="" class="" id="" spacing_medium="" margin_top_medium="" margin_bottom_medium="" spacing_small="" margin_top_small="" margin_bottom_small="" margin_top="" margin_bottom="" padding_dimensions_medium="" padding_top_medium="" padding_right_medium="" padding_bottom_medium="" padding_left_medium="" padding_dimensions_small="" padding_top_small="" 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sticky="off" sticky_devices="small-visibility,medium-visibility,large-visibility" sticky_background_color="" sticky_height="" sticky_offset="" sticky_transition_offset="0" scroll_offset="0" animation_type="" animation_direction="left" animation_color="" animation_speed="0.3" animation_delay="0" animation_offset="" filter_hue="0" filter_saturation="100" filter_brightness="100" filter_contrast="100" filter_invert="0" filter_sepia="0" filter_opacity="100" filter_blur="0" filter_hue_hover="0" filter_saturation_hover="100" filter_brightness_hover="100" filter_contrast_hover="100" filter_invert_hover="0" filter_sepia_hover="0" filter_opacity_hover="100" filter_blur_hover="0"][fusion_builder_row][fusion_builder_column type="1_1" layout="1_1" align_self="auto" content_layout="column" align_content="flex-start" valign_content="flex-start" content_wrap="wrap" spacing="" center_content="no" column_tag="div" link="" target="_self" link_description="" min_height="" 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animation_type="" animation_direction="left" animation_color="" animation_speed="0.3" animation_delay="0" animation_offset="" last="true" border_position="all" first="true"][fusion_text columns="" column_min_width="" column_spacing="" rule_style="" rule_size="" rule_color="" hue="" saturation="" lightness="" alpha="" content_alignment_medium="" content_alignment_small="" content_alignment="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" sticky_display="normal,sticky" class="" id="" margin_top="" margin_right="" margin_bottom="" margin_left="" fusion_font_family_text_font="" fusion_font_variant_text_font="" font_size="" line_height="" letter_spacing="" text_transform="" text_color="" animation_type="" animation_direction="left" animation_color="" animation_speed="0.3" animation_delay="0" animation_offset="" logics=""]

    The AGC/ABA Construction State Law Matrix  is the most comprehensive and concise resource available for quickly locating information on state laws affecting public or private construction projects.

    Updated annually by the American Bar Association Forum on Construction Law, your subscription provides searchable online information for all fifty states, DC, and Puerto Rico, which can be easily sorted by state or topic area.

    Don’t bid on another out-of-state project before getting the legal requirements right to price out your bid or proposal!

    This essential resource covers 60+ issues from bidding to payment to warranty including:

    • Licensing Requirements
    • Prevailing Wages
    • Pay If-Paid/Pay-When-Paid
    • Bidding Requirements
    • Prequalification
    • Lien Notices and Filing
    • MBE, DBE, WBE
    • Prompt Payment
    • Bond Requirements
    • Design-Build
    • CM At-Risk
    • P3s
    • Statute of Repose
    • Immigration

     

    [/fusion_text][fusion_button link="https://store.agc.org/AGC/Store/StoreLayouts/Item_Detail.aspx?iProductCode=8500&CATEGORY=1900&utm_source=informz&utm_medium=email&utm_campaign=store&_zs=6eoMh1&_zl=pBXD9" title="" target="_self" link_attributes="" alignment_medium="" alignment_small="" alignment="center" modal="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" sticky_display="normal,sticky" class="" id="" color="default" button_gradient_top_color_hover="" hue="" saturation="" lightness="" alpha="" button_gradient_top_color="" button_gradient_bottom_color_hover="" button_gradient_bottom_color="" gradient_start_position="" gradient_end_position="" gradient_type="" radial_direction="" linear_angle="180" accent_hover_color="" accent_color="" type="" bevel_color="" bevel_color_hover="" border_top="" border_right="" border_bottom="" border_left="" border_radius_top_left="" border_radius_top_right="" border_radius_bottom_right="" border_radius_bottom_left="" border_hover_color="" border_color="" size="" padding_top="" padding_right="" padding_bottom="" padding_left="" fusion_font_family_button_font="" fusion_font_variant_button_font="" font_size="" line_height="" letter_spacing="" text_transform="" stretch="default" margin_top="" margin_right="" margin_bottom="" margin_left="" icon="fa-arrow-alt-circle-right fas" icon_position="right" icon_divider="no" hover_transition="none" animation_type="" animation_direction="left" animation_color="" animation_speed="0.3" animation_delay="0" animation_offset=""]Access the Construction State Law Matrix[/fusion_button][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

    " target="_blank">Information on State Laws Affecting Construction with AGC/ABA Matrix

    More than 60 issues are covered, including licensing, liens, notice requirements, pay if paid, prompt pay, and prevailing wages. AGC members save 25%.  [...]

    By |2023-10-17T14:40:50-05:00September 28th, 2023|CICPAC, Resources|

    Article by American Global, published on the IRMI website

    While the latter half of 2022 brought some relief from the worst impacts of the global pandemic, supply chain disruptions, labor challenges, and significant commodity price spikes, we are now challenged with a national economy that is dealing with the highest inflation in 40 years. This inflationary pressure and increasing labor costs have caused key central banks to take action to tame inflation, creating the swiftest rise in interest rates in decades, which opens up a real potential for a recession in 2023.

    For our industry, the next logical question becomes, "What impacts will this have on the construction community, and specifically, how will sureties react when it comes to underwriting new (and even existing) clients?"

    Sections covered in article:

    [/fusion_text][fusion_button link="https://www.irmi.com/articles/expert-commentary/surety-outlook-and-underwriting-changes-in-work-in-progress" title="" target="_blank" link_attributes="" alignment_medium="" alignment_small="" alignment="center" modal="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" sticky_display="normal,sticky" class="" id="" color="default" button_gradient_top_color_hover="" hue="" saturation="" lightness="" alpha="" button_gradient_top_color="" button_gradient_bottom_color_hover="" button_gradient_bottom_color="" gradient_start_position="" gradient_end_position="" gradient_type="" radial_direction="" linear_angle="180" accent_hover_color="" accent_color="" type="" bevel_color="" bevel_color_hover="" border_top="" border_right="" border_bottom="" border_left="" border_radius_top_left="" border_radius_top_right="" border_radius_bottom_right="" border_radius_bottom_left="" border_hover_color="" border_color="" size="" padding_top="" padding_right="" padding_bottom="" padding_left="" fusion_font_family_button_font="" fusion_font_variant_button_font="" font_size="" line_height="" letter_spacing="" text_transform="" stretch="default" margin_top="" margin_right="" margin_bottom="" margin_left="" icon="" icon_position="left" icon_divider="no" hover_transition="none" animation_type="" animation_direction="left" animation_color="" animation_speed="0.3" animation_delay="0" animation_offset=""]Continue Reading[/fusion_button][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]" target="_blank">Surety Outlook and Underwriting Changes in Work-in-Progress

    Article by American Global, published on the IRMI websiteWhile the latter half of 2022 brought some relief from the worst impacts of the global pandemic, [...]

    By |2023-07-25T15:46:14-05:00July 25th, 2023|AM Whitepaper, CICPAC|
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