Company: LGN
Filing Date: 2025-12-09
Form Type: S-1
Source: 0001193125-25-312729
Chunk: 305

Company: Legence Corp.
Filing Date: 2025-12-09
Form: S-1
Chunk 305
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 estimates and assumptions related primarily to Revenue, Goodwill, Income taxes and Business combinations.

Revenue Recognition

The Company’s
revenue is primarily derived from contracts that can span from one day to several years, though most contracts are completed in less than one year. Revenue is recognized when promised goods or services are transferred to customers in an amount that
reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

Refer to “” for additional information.

Cash and Cash Equivalents

Cash and cash equivalents includes cash in banks and highly liquid investments with maturities of three months or less at the date of purchase.
The Company considers highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents.

Restricted Cash

At various points in time, the Company may have restricted cash. Restricted cash represents legally restricted funds that are not
available for general business use and are set aside for specific purposes. The Company classifies restricted cash separately from cash and cash equivalents on the Consolidated Balance Sheets.

Refer to “” for additional information.

Accounts Receivable, Contract Assets and Allowance for Credit Losses

Accounts receivable primarily consists of contracts receivable, which include billed and billable amounts for goods and services provided to
customers for which the Company has an unconditional right to payment. Amounts contingent on anything other than the passage of time are contract assets. Accounts receivable also include other receivables which primarily consists of income tax
receivables and amounts due from government and insurance entities. Refer to “” for additional information.

The 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

F-56

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 “ Note 3—Revenue Recognition and Related Balance Sheet Accounts” 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