Company: LGN
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0002052568-25-000018
Chunk: 132

Company: Legence Corp.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 132
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 TRA are recorded in Other income, net and Income tax expense, respectively, in the Condensed Consolidated Statement of Operations.Refer to "Note 14—Tax Receivable Agreement" and "Note 15—Income Taxes" for additional information.Recent Accounting PronouncementsTargeted Improvements to the Accounting for Internal-Use Software - In September 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-06, "Intangibles-Goodwill and Other- Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software" ("Update 2025-06"), which removes references to the project stages and requires entities to begin capitalizing software costs when both of the following occur: (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended. Update 2025-06 is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Early adoption and a prospective, retrospective or modified transition approach are permitted. The Company is currently evaluating the impact that the adoption of Update 2025-06 will have on its Consolidated Financial Statements.Measurement of Credit Losses for Accounts Receivable and Contract Assets - In July 2025, the FASB issued ASU 2025-05, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets" ("Update 2025-05"), which allows entities to elect a practical expedient for current accounts receivables and contract assets to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. Update 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years, and is required to be applied on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of Update 2025-05 will have on its Consolidated Financial Statements.Business Combinations and Consolidation - In May 2025, the FASB issued ASU 2025-03, "Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity" ("Update 2025-03"). This update revises current guidance for determining the accounting acquirer for a transaction effected