Company: LGN
Filing Date: 2025-08-25
Form Type: S-1/A
Source: 0001193125-25-186788
Chunk: 274

Company: Legence Corp.
Filing Date: 2025-08-25
Form: S-1/A
Chunk 274
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 Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S.
GAAP”).

Principles of Consolidation

The
Consolidated Financial Statements include the accounts of Legence, its wholly owned subsidiaries and certain Variable Interest Entities (“VIE”) of which the Company is the primary beneficiary. Legence assesses whether it is the primary
beneficiary of a VIE, which is the case if the Company, in combination with its related parties, has both (1) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance and (2) the
obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. When Legence is deemed to be the primary beneficiary, the VIE is consolidated and the equity interest in the VIE held by a third-party is
accounted for as a noncontrolling interest.

For VIEs that are not consolidated, the Company accounts for its investments using the equity method.

All intercompany accounts and transactions have been eliminated.

Please refer to “” for additional information.

Financial statement reclassification

Certain previously
reported amounts have been reclassified to conform to the current year presentation in the Consolidated Financial Statements. Interest expense, net of capitalized interest and Interest income on the Consolidated Statements of Operations were
previously reported on a combined basis, but given the materiality of Interest income in the current year, they are presented separately. This reclassification had no net effect on the Company’s reported results of operations.

F-16

Legence Holdings LLC and Subsidiaries

Notes to Consolidated Financial Statements

Business Combinations

Business combinations are recorded in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations(“ASC
805”). Under the acquisition method of accounting, the consideration transferred by the acquirer is assigned to the identifiable assets acquired and liabilities assumed as of their acquisition date fair values. Determining the fair value of
certain assets and liabilities assumed is judgmental in nature and often involves the use of significant estimates and assumptions. ASC 805 provides certain recognition and measurement exceptions such as leases, contract assets and contract
liabilities, and income taxes, which are accounted for under ASC 842, ASC 606 and ASC 740, respectively. Goodwill represents the excess of the consideration transferred over the fair value of identifiable assets acquired and liabilities assumed.
Bargain purchase gains represent the excess of the fair value of identifiable