Company: DREM
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004861
Chunk: 123

Company: Dream Homes & Development Corp.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 123
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 Repairs and maintenance costs are expensed as incurred, and renewals and betterments are capitalized.

Use
of Estimates

 The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying
notes. Actual results could differ materially from these estimates.

    F-7

 Fair
Value of Financial Instruments

 Fair
value is defined as the price that we would receive to sell an asset or pay to transfer a liability (an exit price) in an orderly transaction
between market participants on the measurement date. In determining fair value, GAAP establishes a three-level hierarchy used in measuring
fair value, as follows:

    ●
    Level
    1 inputs are quoted prices available for identical assets and liabilities in active markets.

    ●
    Level
    2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and
    liabilities in active markets or other inputs that are observable or can be corroborated by observable market data.

    ●
    Level
    3 inputs are less observable and reflect our own assumptions.

Our
financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses and loans payable
to related parties. The carrying amount of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, and
loans payable to related parties approximates fair value because of their short maturities.

Construction
Contracts

Revenue
recognition: The Company recognizes construction contract revenue using the percentage-of-completion method, based primarily on contract
cost incurred to date compared to total estimated contract cost. Cost of revenue includes an allocation of general overhead cost. 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