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Contractors eye decision by accounting board.

A financial accounting standard (known as FAS 150) that would have been detrimental to closely held contracting companies by requiring them to account for mandatorily redeemable shares on their income statements as a liability has been "indefinitely delayed."

This standard, proposed by the Financial Accounting Standards Board (FASB), Norwalk, Conn., would wipe out much of the net worth of private companies and make it extremely difficult for them to obtain bonding and insurance on projects, according to a release from the Associated General Contractors of America, Alexandria, Va.

Most non-public construction-related companies have buy/sell agreements. FAS 150 originally required companies to classify mandatorily redeemable shares as a liability on their balance sheets. In many cases, this would wipe out the net worth of these closely held businesses, making it difficult to demonstrate collateral to lenders, to insurance companies and to bonding agents.
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Title Annotation:C&D News
Comment:Contractors eye decision by accounting board.(C&D News)
Publication:Recycling Today
Article Type:Brief Article
Geographic Code:1USA
Date:Apr 1, 2004
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