Conquest Engineering Group Company

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CONQUEST ENGINEERING GROUP COJv1PANY NOTES TO THE FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES . General The Company was incorporated under the laws of the State of Florida and began operations in April 2002. The Company was created for t.~e purpose of performing general construction contracts. All projects are located in the South Florida area. . Use ofestimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the fmancial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. . -ffevenue-"re-cognrnon-n._.. .0 ....... _. . -. .__.. . __Un". Contract revenue is recognized using the percentage-of-completion method. Under this method, the percentage of contract revenue to be recognized currently is computed as that percentage of estimated total revenue that incurred costs to date bear to total estimated costs, after giving effect to the most recent estimates of cost to complete. It is reasonably possible that changes in estimates may occur in the near term. Revisions in cost and revenue estimates are reflected in the period in which the facts which require the revision become known. When the revised cost estimates indicate a .Ioss on an individual contract, the total estimated loss is provided for currently in its entirety without regard to tpe percentage of completion. Contract costs include all direct material and labor and those indirect costs related to contract performance, such as indirect labor, supplies, equipment rental, repairs, and subcontractor costs. Selling, general, and administrative expenses are charged to operations as incurred, The asset "cost and estimated earnings in excess of billings On uncompleted contracts", represents revenues recognized in excess of amounts billed. The liability, "billings in excess of costs and estimated earnings on uncompleted contracts", represents billings in excess of revenues recognized, Long-Lived Assets Long-lived assets, such as property and equipment, are reviewed on an ongoing basis for impainnent based on comparison of carrying value against undiscounted future cash flows. If impairment is identified, the assets carrying amounts are adjusted to fair value. There were no such adjustments during the years ended December 31,2007 and 2006, Depreciation Depreciation is provided for on the straight-line method over the estimated useful lives of the assets. 6 .:.