A & A:

• Prepare F/S
• Prepare job status reports for bonding
• Prepare state contractor’s license applications

Business Advisory Services:

• Provide/support advanced construction-industry accounting software
• Facilitate meetings between accounting and project managers
• Train/assist with monthly financial statement preparation
• Design custom management reports

Taxes:

• Annual tax planning and planning for future transactions to minimize annual and cumulative tax liability
• Preparation of all kinds of tax returns aimed at obtaining every benefit of the complex and constantly changing tax law

Wealth Accumulation and Management:

• Pension/profit sharing/401(k) plan design, installation and administration
• Compensation plan development to maximize tax benefits available to owners and key employees
• Investment education for plan participants and owners
• Business succession/exit strategy planning and implementation
• Estate planning to minimize estate and gift taxes

In response to concerns that financial statement users were not fully aware of corporate assets, debt, and other obligations, the Financial Accounting Standards Board issued FASB Interpretation 46 in December 2003 entitled Consolidation of Variable Interest Entities.  Common VIEs might include equipment rental companies, building holding companies, and project-specific companies.  This Interpretation provides guidance in determining when variable interest entities (“VIEs”) should be consolidated into the financial statements of the primary beneficiary (e.g. the operating company).  The consolidation provisions of FIN 46 are effective in fiscal years beginning after December 15, 2004 and specifically exclude employee benefit plans and life insurance entities.

FIN 46 created a series of tests to determine whether or not an entity is a VIE that should be consolidated.  If the entity’s equity is not sufficient to permit it to finance its activities without additional financial support from other parties, then the entity should be consolidated.  In addition, if the operating company has a direct or indirect ability to make decisions for the entity or absorb expected losses or returns from the entity, it will also need to be consolidated.  In other words, if the entity has a significant amount of debt, the entity’s debt is guaranteed by the owner and / or operating company, or the owner and / or operating company has made unsecured loans to the entity, it will probably have to be consolidated.  Once again, common VIEs might include equipment rental companies, building holding companies, and project-specific companies.

FIN 46 is a complex document that introduces new concepts to accounting and has been revised several times since its original issuance.  Interpretation and application of its concepts can be difficult and will depend on your specific circumstances.  When a determination is made regarding the consolidation of your entities, we will notify you.

Sincerely,

Large & Gilbert, P.C.