Company: DREM
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004861
Chunk: 386

Company: Dream Homes & Development Corp.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 6
Chunk 386
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    Costs
    and estimated earnings in excess of billings represent the excess of contract costs and profits (or contract revenue) over the amount
    of contract billings to date and are classified as a current asset. 

    ●
    
    Billings
    in excess of costs and estimated earnings represent the excess of contract billings to date over the amount of contract costs and
    profits (or contract revenue) recognized to date and are classified as a current liability. 

Costs
and estimated earnings in excess of billings result when either: 1) costs are incurred related to certain claims and unapproved change
orders, or 2) the appropriate contract revenue amount has been recognized in accordance with the percentage-of-completion accounting
method, but a portion of the revenue recorded cannot be billed currently due to the billing terms defined in the contract. Claims occur
when there is a dispute regarding both a change in the scope of work and the price associated with that change. Unapproved change orders
occur when there is a dispute regarding only the price associated with a change in scope of work. For both claims and unapproved change
orders, the Company recognizes revenue, but not profit, when it is determined that recovery of incurred cost is probable and the amounts
can be reliably estimated.

 Change
in Estimates:

 The
Company’s estimates of contract revenue and cost are highly detailed and many factors change during a contract performance period
that result in a change to contract profitability. These factors include, but are not limited to, differing site conditions: availability
of skilled contract labor: performance of major material suppliers and subcontractors: on-going subcontractor negotiations and buyout
provisions: unusual weather conditions: changes in the timing of scheduled work: change orders: accuracy of the original bid estimate:
changes in estimated labor productivity and costs based on experience to date: achievement of incentive-based income targets: and the
expected, or actual, resolution terms for claims. The factors that cause changes in estimates vary depending on the maturation of the
project within its lifecycle. For example, in the ramp-up phase, these factors typically consist of revisions in anticipated project
costs and during the peak and close-out phases, these factors include the impact of change orders and claims as well as additional revisions
in remaining anticipated project costs. Generally, if the contract is at an early stage of completion, the current period impact is smaller
than if the same change in estimate is made to the contract at a later stage of