Company: ACA
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001739445-25-000026
Chunk: 1

Company: Arcosa, Inc.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 8
Chunk 1
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 registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.  

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

59

Accounting for business combination

Description of the MatterAs discussed in Note 2 to the consolidated financial statements, the Company completed a significant acquisition during 2024 of the construction materials business of Stavola Holding Corporation and its affiliated entities for a total purchase price of $1.2 billion. The transaction was accounted for as a business combination.Auditing the Company's accounting for the business combination was complex due to the significant estimation uncertainty in determining the fair value of the mineral reserves using the multi-period excess earnings method. The significant estimation uncertainty was primarily due to the sensitivity of the fair value of the mineral reserves to underlying significant assumptions including the weighted average cost of capital and certain assumptions that form the basis of the prospective financial information (i.e. average selling price and EBITDA margin). These significant assumptions are forward-looking and could be affected by future economic and market conditions.How We Addressed the Matter in Our AuditWe obtained an understanding, evaluated the design, and tested the operating