Company: LGN
Filing Date: 2025-04-30
Form Type: DRS/A
Source: 0000950123-25-003868
Chunk: 259

Company: Legence Corp.
Filing Date: 2025-04-30
Form: DRS/A
Chunk 259
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Company extends credit to its customers in the normal course of business and performs ongoing credit evaluations of its customers maintaining allowances for estimated credit losses that, when realized, have been within management’s
expectations. The Company estimates and records expected credit losses over the contractual life of its financial assets measured at amortized cost, including accounts receivable and contract assets. The estimate uses a loss-rate method based on
historical loss activity adjusted for current market conditions and reasonable and supportable forecasts, as applicable. Accounts receivable are generally written off when they are determined to be uncollectible after reasonable collection efforts
have been made and collection appears unlikely.

See “” for additional
information.

Deferred Contract Costs

Deferred
contract costs, included within Prepaid expenses and other current assets, represent costs to (a) obtain a contract that are incremental because they were only incurred as a result of securing that contract and (b) costs to fulfill a
contract that occur prior to transferring a good or service to a customer. Deferred contract costs are amortized over the life of the underlying contract consistent with the transfer to the customer of the good or service to which they relate. Both
selling expenses that are not incremental to a contract and costs incurred to fulfill a contract that occur prior to transferring a good or service to a customer that are not expected to be recovered are expensed as incurred.

Deferred Offering Costs

Offering costs, which include
legal, accounting, printing, and other third-party fees that are incremental and directly related to the Company’s anticipated equity financing such as an initial public offering (“IPO”) are capitalized within Other assets on the
Consolidated Balance Sheets. These costs are deferred until the equity financing is consummated, at which point they are recorded as a reduction of the proceeds from the equity financing. If the planned equity financing is abandoned, terminated, or
significantly delayed, all deferred offering costs will be expensed immediately within operating expenses. Deferred offering costs as of December 31, 2024 totaled $3.7 million. There were no deferred offering costs as of December 31,
2023.

Property and Equipment, Net

Property and
equipment is stated at cost, net of accumulated depreciation. Interest costs are capitalized on qualified capital projects as part of the net asset cost until the asset is ready for its intended use. Depreciation is recorded using the straight-line
method over the estimated useful lives of the assets.

Software obtained for internal use and internal and external software development costs incurred
during the application development stage