Company: DREM
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004861
Chunk: 70

Company: Dream Homes & Development Corp.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 8
Chunk 70
---
. Changes
to total estimated contract cost or losses, if any, are recognized in the period in which they are determined.

The
Company generally provides limited warranties for work performed under its construction contracts with periods typically extending for
a limited duration following substantial completion of the Company’s work on a project.

The
Company classifies construction-related receivables and payables that may be settled in periods exceeding one year from the balance sheet
date, if any, as current assets and liabilities consistent with the length of time of its project operating cycle. For example:

    ●
    
    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,