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<br />.... <br /> <br />SOUTHEASTERN ENGINEERING CONTRACTORS, INC. <br />NOTES TO THE FINANCIAL STATEMENTS <br /> <br />NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED <br /> <br />Income Taxes <br />The Company uses the percentage-of-completion method of reporting income from long- <br />term construction contracts for financial statements purposes and the completed contract <br />method for income tax purposes. <br /> <br />The Company has elected, with the consent of its stockholders, to be taxed as an S <br />corporation under the provisions of Section 1362 of the Internal Revenue Code and state <br />laws. Under these provisions, the Company does not pay federal or state income taxes on its <br />taxable income. Instead the stockholders are liable for individual income taxes on their <br />respective share of the Company's income. <br /> <br />Long-Lived Assets <br />Long-lived assets, such as property and equipment, are reviewed on an ongoing basis for <br />impairment based on comparison of carrying value against undiscounted future cash flows. <br />If impairment is identified, the assets carrying amounts are adjusted to fair value. There <br />were no such adjustments during the six months ended June 30, 2009 and 2008. <br /> <br />NOTE2-CONTRACTSRECEIVABLE <br /> <br />. Contracts receivable are as follows: <br /> <br />2009 <br /> <br />2008 <br /> <br />Billed <br />Completed contracts <br />Due <br />Contracts in progress <br />Due <br />Retainage <br /> <br />$ 393,592 <br /> <br />$ 479,137 <br /> <br />3,887,684 <br />3,083,342 <br />$ 7,364,618 <br /> <br />3,155,153 <br />2,448,964 <br />$ 6,083,254 <br /> <br />Contracts receivable as of June 30, 2009 are aged as follows: <br /> <br />0- 30 days $ 2,243,128 <br />31- 60 days 920,461 <br />61 - 90 days 317,477 <br />Over 91 days 800,010 <br />Retainage 3,083,342 <br /> $ 7,364,618 <br /> <br />The Company collected approximately $ 3,400,000 of the receivables through September <br />21,2009. <br /> <br />7 <br />