Company: LGN
Filing Date: 2025-07-15
Form Type: DRS/A
Source: 0000950123-25-006399
Chunk: 262

Company: Legence Corp.
Filing Date: 2025-07-15
Form: DRS/A
Chunk 262
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 to 17 C.F.R. Section 200.83 Revenue — Refer to Notes 2 and 3 to the financial statements Critical Audit Matter Description The majority of the Company’s contracts are fixed price and have over time performance obligations. The Company primarily measures the progress toward complete satisfaction of the performance obligation(s) of these contracts using an input method (i.e., “cost-to-cost”). The accuracy of the Company’s revenue and profit recognition in each year depends on the accuracy of management’s estimates of the cost to complete for each project. There are several factors that can contribute to changes in estimates of contract cost and profitability, which may cause fluctuations in gross profit and gross profit margin from period to period. Given the significant judgment necessary to estimate the cost to complete for contracts where the Company applies the cost-to-cost input method, auditing these estimates required extensive audit effort due to the complexity of the estimates and a high degree of auditor judgment when evaluating the results of audit procedures. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to costs to complete for fixed price contracts included the following, among others:

| • |     | We evaluated the reasonableness and consistency of the methods and assumptions used by management to estimate 
 cost to complete on fixed price contracts.                                                                    |

| • |     | We evaluated management’s ability to accurately estimate cost to complete by comparing current gross profit 
 margin to historical and prospective gross profit margin for fixed price contracts.                         |

| • |     | We selected a sample of fixed price contracts and performed the following: |

| ○ |     | Evaluated management’s ability to estimate costs at completion for each selected contract by performing                                                                                                                           
 corroborating inquiries with the Company’s project managers and personnel involved with the selected contracts, including inquiries related to the timeline to completion and estimates of future costs to complete the contract. |

| ○ |     | Selected a sample of estimates of costs to complete and evaluated management’s estimates by comparing to 
 supporting documents for those estimates.                                                                |

Goodwill — Refer to Notes 2 and 5 to the financial statements Critical Audit Matter Description Goodwill is evaluated for impairment at the reporting unit level, at least, on an annual basis. Fair value of a reporting unit is estimated based on a market approach and an income approach. The income approach utilizes discounted future cash flows. Assumptions critical to the fair value estimate utilizing the discounted cash flow model include the revenue growth rate, EBITDA margin, and discount rate. We identified goodwill for three reporting units with a