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TGSV ENTERPRISES, INC. <br /> <br />NOTES TO FINANCIAL STATEMENTS <br /> <br />DECEMBER 31, 2017 <br /> <br /> <br />1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) <br /> <br />Revenue and cost recognition (continued) <br /> <br />The asset, “costs and estimated earnings in excess of billings on uncompleted contracts,” <br />represents revenues recognized in excess of amounts billed. The liability, “billings in excess <br />of costs and estimated earnings on uncompleted contracts,” represents billings in excess of <br />revenues recognized. <br /> <br />Use of estimates <br /> <br />The preparation of financial statements in conformity with accounting principles generally <br />accepted in the United States of America requires management to make estimates and <br />assumptions that affect the reported amounts of assets and liabilities and disclosure of <br />contingent assets and liabilities at the date of the financial statements and reported amounts <br />of revenues and expenses during the reporting period. Actual results could differ from those <br />estimates. Management periodically evaluates estimates used in the preparation of the <br />financial statements for continued reasonableness. Appropriate adjustments, if any, to the <br />estimates used are made prospectively based upon such periodic evaluation. It is reasonably <br />possible that changes may occur in the near term that would affect management’s estimates <br />with respect to the percentage-of-completion method, allowance for doubtful accounts and <br />accrued expenses. Revisions in estimated contract profits are made in the period in which <br />circumstances requiring the revision become known. <br /> <br />Balance sheet classifications <br /> <br />The Company includes in current assets and liabilities retainage amounts receivable and <br />payable under construction contracts, which may extend beyond one year. A one-year time <br />period is used as the basis for classifying all other current assets and liabilities. <br /> <br />Short-term investments <br /> <br />All highly liquid investments with stated maturities of greater than three months are <br />classified as short-term investments. The appropriate classification of the investments is <br />determined at the time of purchase and their designation is reevaluated at each balance sheet <br />date. In general, investments with original maturities of greater than three months and <br />remaining maturities of less than one year are classified as short-term investments. <br />See independent accountants’ review report. <br />-6-