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<br />SHORELINE FOUNDATION. INC. <br /> <br />NOTES TO FIr\ANCIAL STATEMENTS <br />FOR THE YEAR ENDED DECEMBER 3L 2009 <br /> <br />L GENERAL AND SUi\fMARY OF SIGNIFICANT ACCOUNTING POL.ICES <br /> <br />General - Shoreline Foundation, Inc. ("The Company") wus incorporated in 1986 pursuant 10 the laws of <br />the State of Florida to cn"a!lC in the maritime construction business. Its principal activities arc the . <br />'" -. <br />installution, maintenance, and repair of sea walls, docks, pilings. and rdated maritime services. along with <br />construction of embanKment stabilization on various interstate highways. Their customers primarily <br />consist of developers. contractors, government agl~llcies and private o\vners of existing waterfront <br />properties inthc United States and the Caribbean. <br /> <br />The work performed by the Company is substantially under fixed-price contracts modi fied by incenti ve <br />provisions. The Company follows the practice of filing statutory liens on all construction projects where <br />collection problems are anticipated. The liens serve as colJuteral for accoullts receivable. <br /> <br />Use (~r Estimatl?.\' -The preparation of financial SlatenlelllS in conformity with accounting principles <br />generally accepted in the United States of America requires management to make estimates and <br />assumptions that affect the reponed amounts of assets and liabilities and disclosure of contingent assets <br />and liabilities at the date of the financial statements and the reponed amounts of revenues and expenses <br />during the reponing period. Actual results could differ from those estimates. <br /> <br />RCI'CllllC Uecognition- The Company recognizes revenue on long-term construction contracts using the <br />percentage of completion method. measured by the cost-to-eost method. Revenue on short-term and time <br />and material contracts arc recognized CUITclIlly as the work is performed. <br /> <br />Contract costs include all direct materia] and labor costs and those indirect costs related to contract <br />performance. such as indirect labor. supplies, lOols and repairs. Selling. general and administrative costs <br />are charged to expenses as incurred. Provisions for estimmed losses on uncompleted contracts arc made in <br />the period in which such losses are determined. Changes in job performance, job conditions, and estimated <br />profitability may result in revisions to costs and income, which are recognized in the period in which the <br />revisions arc determined. <br /> <br />The asset, '"Costs and estimated earnings in excess of billings on uncompleted cOlllracts". represents <br />revenlles recognized in excess of amounts billed. The liabiJilY. '"Billings in excess of COStS and estimated <br />eamings oIluncomplcted contracts". represents billings in excess of revenues recognized. <br /> <br />Sigl/(jicam Customers - During the year ended December 31, 2009, the Company deri vcd revenues of <br />approximately 59,862.000 from oIle customer. In addition, included in accouTlts receivable-trade as of <br />December 31, 2009 is approximately $2.552.000 from slIch customer. <br /> <br />Cash Eqllil'aICI1!.\' - The Company considers all highly liquid investments purchased with an original <br />maturity of three months or Jess to be cash equivalents. As of December 31,2009, the Company docs not <br />have any cash equivalents. <br /> <br />- 5 - <br />