Overton Ragland, CPA’s Post

Construction entities have to evaluate transactions through the unified five step approach (Ever since Topic 606). Learn how to determine the transaction price, and estimate variable consideration in construction contracts, on our blog.

Construction entities have to evaluate transactions through the unified five step approach (Ever since Topic 606). Learn how to determine the transaction price, and estimate variable consideration in construction contracts, on our blog.

Construction entities have to evaluate transactions through the unified five step approach (Ever since Topic 606). Learn how to determine the transaction price, and estimate variable consideration in construction contracts, on our blog.

Construction entities have to evaluate transactions through the unified five step approach (Ever since Topic 606). Learn how to determine the transaction price, and estimate variable consideration in construction contracts, on our blog.

Construction entities have to evaluate transactions through the unified five step approach (Ever since Topic 606). Learn how to determine the transaction price, and estimate variable consideration in construction contracts, on our blog.

Construction entities have to evaluate transactions through the unified five step approach (Ever since Topic 606). Learn how to determine the transaction price, and estimate variable consideration in construction contracts, on our blog.

Construction entities have to evaluate transactions through the unified five step approach (Ever since Topic 606). Learn how to determine the transaction price, and estimate variable consideration in construction contracts, on our blog.

Construction entities have to evaluate transactions through the unified five step approach (Ever since Topic 606). Learn how to determine the transaction price, and estimate variable consideration in construction contracts, on our blog. https://hubs.ly/Q02pgW3K0

When it comes to construction contracts, here are some of the most important commercial terms and conditions you should consider: 1. Type: Specifies the type of contract (e.g., lump sum, costplus, time and materials).    2. RCV (Rate Contract Value): Total contract value agreed upon between parties. 3. Insurance: Details the insurance coverage required by both parties (e.g., liability insurance, workers' compensation). 4. Payment Terms: Specifies how and when payments will be made (e.g., milestones, monthly, upon completion). 5. ABG (Advance Bank Guarantee): Guarantee provided by the contractor to ensure repayment of any advance payments received. 6. Recovery of Advance: Conditions under which advances paid to the contractor can be recovered. 7. PBG (Performance Bank Guarantee): Guarantee provided by the contractor to ensure performance as per contract terms. 8. Recovery of PBG: Conditions under which the PBG can be invoked or recovered by the client. 9. Duration: Overall duration of the contract. 10. Schedule: Detailed timeline for project milestones and deliverables. 11. Start Date: Date when the construction work is expected to commence. 12. End Date: Date by which the construction work is expected to be completed. 13. Progress Payment: Payment made based on completion of specified stages or milestones. 14. Retention: Percentage of payment withheld until satisfactory completion of the contract. 15. Recovery of Retention: Conditions under which retention amounts are released to the contractor. 16. DLP (Defects Liability Period): Period during which the contractor is responsible for correcting any defects. 17. GST, Tax: Applicable taxes and how they will be handled in invoicing and payments. 18. LD (Liquidated Damages): Penalties for delays or failure to meet contractual obligations. 19. DRM (Dispute Resolution Mechanism): Process for resolving disputes between parties. These terms and conditions are crucial for defining the rights, obligations, and expectations of both parties involved in construction projects. They help ensure clarity and mitigate risks during the project lifecycle.

Contractual claims in Construction Contracts; These arise from express terms of a contract and form by far the most frequent kind of claim. They may relate to any or all of the following: (a) fluctuations. (b) variations. (c) extensions of time. (d) loss and/or expense due to matters affecting regular progress of the works.