v3.26.1
Changes in Accounting Estimates
3 Months Ended
Mar. 31, 2026
Change in Accounting Estimate [Abstract]  
Changes in Accounting Estimates

12. Changes in Accounting Estimates

Accounting for customer construction contracts requires the use of various estimation techniques to determine total contract revenue and costs. The Company's cost-to-cost method for recognizing revenue include estimates and assumptions about future events, including labor productivity and availability, material costs and availability, and the complexity of work to be performed.

Estimates are updated as conditions evolve. Changes in job performance, site conditions, subcontractor performance, and scope modifications may result in revisions to estimated costs and profitability. The accuracy of revenue and profit recognition in any period depends on the reliability of these estimates. Because the Company manages a portfolio of contracts of varying size and complexity, changes in individual contract estimates may offset each other. However, significant changes in estimates can materially affect reported profitability.

Key factors contributing to changes in contract estimates include:

Completeness and accuracy of original bids
Scope changes and related cost recognition
Extended overhead from customer or weather-related delays
Subcontractor and supplier performance
Site conditions differing from bid assumptions (where contract remedies are unavailable)
Labor availability and skill levels in project geographies
Material availability and proximity

These factors, along with the stage of completion and margin mix of contracts in progress, may cause fluctuations in gross profit between periods, which can be significant.

Changes in estimates of contract revenue, cost, or extent of completion are accounted for in the period the changes become known. Such changes are considered normal recurring adjustments inherent in the cost-to-cost revenue recognition method. The effect of changes in estimates for contracts in progress at December 31, 2025 increased revenue for the quarter ended March 31, 2026 by $4,728,186. The effect of changes in estimates for contracts in progress at December 31, 2024 increased revenue for the quarter ended March 31, 2025 by $821,195.