Company: LGN
Filing Date: 2025-11-03
Form Type: DRS
Source: 0001193125-25-262782
Chunk: 253

Company: Legence Corp.
Filing Date: 2025-11-03
Form: DRS
Chunk 253
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 receivable, which include billed and billable amounts for goods and services provided to
customers for which the Company has an unconditional right to payment. Amounts contingent on anything other than the passage of time are contract assets. Accounts receivable also include other receivables which primarily consists of income tax
receivables and amounts due from government and insurance entities. Refer to “” for additional information.

The Company extends credit to its customers in the normal course of business and performs ongoing credit evaluations of its customers
maintaining allowances for estimated credit losses that, when realized, have been

F-17

Confidential Treatment Requested by Legence Corp. Pursuant to 17 C.F.R. Section 200.83 within management’s expectations. The Company estimates and records expected credit losses over the contractual life of its financial assets measured at amortized cost, including accounts receivable and contract assets. The estimate uses a loss-rate method based on historical loss activity adjusted for current market conditions and reasonable and supportable forecasts, as applicable. Accounts receivable are generally written off when they are determined to be uncollectible after reasonable collection efforts have been made and collection appears unlikely. See “ Note 3—Revenue Recognition and Related Balance Sheet Accounts” for additional information. Deferred Contract Costs Deferred contract costs, included within Prepaid expenses and other current assets, represent costs to (a) obtain a contract that are incremental because they were only incurred as a result of securing that contract and (b) costs to fulfill a contract that occur prior to transferring a good or service to a customer. Deferred contract costs are amortized over the life of the underlying contract consistent with the transfer to the customer of the good or service to which they relate. Both selling expenses that are not incremental to a contract and costs incurred to fulfill a contract that occur prior to transferring a good or service to a customer that are not expected to be recovered are expensed as incurred. Deferred Offering Costs Offering costs, which include legal, accounting, printing, and other third-party fees that are incremental and directly related to the Company’s anticipated equity financing such as an initial public offering (“IPO”) are capitalized within Other assets on the Consolidated Balance Sheets. These costs are deferred until the equity financing is consummated, at which point they are recorded as a reduction of the proceeds from the equity financing. If the planned equity financing is abandoned, terminated, or significantly delayed, all deferred offering costs will be expensed immediately within operating expenses. Deferred offering costs as of December 31, 2024 totaled