construction joint venture

This Subtopic addresses consolidation issues for construction contractors, principally the availability of proportionate gross presentation for investments in unincorporated entities (such as construction joint ventures) that are accounted for under the equity method. Per 810-910-45-1, referencing 810-10-45-14, proportionate gross presentation is generally prohibited for equity-method investments in unincorporated legal entities, but an exception exists when the investee operates in the construction industry (or an extractive industry). Its scope follows that of Subtopic 910-10 (see 910-10-15).

ASC 910-10 is the Overall subtopic of the Contractors—Construction Topic, providing incremental industry-specific guidance for entities that perform construction-type contracts (work built or improved on tangible property to a customer's specifications, usually at the customer's job site under a unique, bid or negotiated contract). Most of its former revenue guidance was superseded by ASU 2014-09, so revenue recognition now follows Topic 606; what remains addresses small-tool depreciation, classification of retainages, proportionate gross presentation for construction joint ventures, and industry disclosures. Entities in scope must also comply with all other applicable GAAP not addressed here (910-10-15-1).