ERNEST - Laserfiche WebLink

Home Browse Search

ERNEST ENERGY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 22 Note 13 - Income Taxes (cont’d.) FASB ASC Subtopic 740-10 requires a “more likely than not” criterion be applied when evaluating the realizability of a deferred tax asset. Management expects to generate sufficient taxable income in the near future to utilize the deferred tax asset. The Company files income tax returns in the U.S. in the federal jurisdiction and a state jurisdiction. With few exceptions, the Company is no longer subject to U.S. federal or state tax examinations by taxing authorities for years before 2021. The years 2021 and 2022 remain subject to examination by taxing authorities. At December 31, 2023, the Company does not believe it has any uncertain tax positions that would require either recognition or disclosure in the accompanying consolidated financial statements. As of December 31, 2023, the Company has a federal and state net operating loss carryforward of $822,565 and $812,092, respectively, which expires in 2042. Note 14 - Backlog The following schedule is a reconciliation of backlog representing signed contracts at December 31, 2023: Balance, January 1, 2023 388,925$ New contracts 8,366,553 8,755,478 Less: Contract revenues 4,365,688 Balance, December 31, 2023 4,389,790$ Remaining construction performance obligations represent the remaining transaction price, including variable consideration not constrained, for which work has not been performed. At December 31, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations was $4,389,790. The Company expects to recognize revenue on approximately 100% of the remaining performance obligations within the next 12 months. Revenue estimates included in the backlog can be subject to change because of project accelerations, cancellations, or delays due to various factors, including but not limited to commercial issues and adverse weather. These factors can also cause revenue to be realized in different periods or in different amounts from those originally reflected in backlog. In many instances, customers are not contractually committed to procure specific volumes of services under a contract. While the Company did not experience any material cancellations during the year ended December 31, 2023, customers may terminate contracts upon notice regardless of whether or not the Company is in default.