Company: DREM
Filing Date: 2025-05-19
Form Type: 10-Q
Source: 0001641172-25-011417
Chunk: 1

Company: Dream Homes & Development Corp.
Filing Date: 2025-05-19
Form: 10-Q
Item: Item 8
Chunk 1
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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.

    F-5

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 depreciation, amortization and 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 amount of contract billings
    to date and are classified as a current asset.

    ●
    Billings in excess of costs
    and estimated earnings represent the excess of contract billings to date over the amount of contract costs and profits (or contract
    revenue) recognized to date and are classified as a current liability.

Costs
and estimated earnings in excess of billings result when either: 1) costs are incurred related to certain claims and unapproved change
orders, or 2) the appropriate contract revenue amount has been recognized in accordance with the percentage-of-completion accounting
method, but a portion of the revenue recorded cannot be billed currently due to the billing terms defined in the contract. Claims occur
when there is a dispute regarding both a change in the scope of work and the price associated with that change. Unapproved change orders
occur when there