JFB Construction Holdings Revenue Disclosure

Note 3 – Revenue from Contracts with Customers

Revenues and related costs on equipment contracts are recognized as the performance obligations for work are satisfied over time in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Under ASC 606, revenue and associated profit will be recognized as the customer obtains control of the goods and services promised in the contract (i.e., performance obligations). All un-allocable indirect costs and corporate general and administrative costs are charged to the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss as it is determined.

In accordance with ASC 606-10-50-5, the Company identifies Revenue from Contracts with Customers using this 5- step model.

By treating our contracts as a single performance obligation, we ensure that our revenue recognition process accurately reflects the economic realities of our business operations across all segments. This approach provides clarity to stakeholders regarding our revenue-generating activities, aligning with the guidance provided in ASC 606-10-55-89 through 55-91.

In accordance with ASC 606-10-50-8, the Company has disclosed significant judgements and changes in judgements related to the recognition of revenue from construction contracts. The application of ASC 606 requires the use of judgment in various aspects of revenue recognition, particularly in the use of the cost-to-cost method. The Company applies the cost-to-cost method to measure progress toward completion. This involves estimating the total contract cost and recognizing revenue based on the ration of cost incurred to the estimated total cost. The Company makes judgements regarding the recognition of revenue related to change orders and claims. Revenue from change orders is included in the transaction price when it is probable the customer will approve the change and the amount can be reliably estimated.

In accordance with ASC 606-10-50-8, the Company recognizes contract assets and liabilities that reflect timing of revenue relative to the amounts billed or paid. Contract balances are reported in the balance sheet as follows:

Contract assets represent revenues recognized in excess of amounts billed on contracts in progress. Contract liabilities represent billings in excess of revenues recognized on contracts in progress. Assets and liabilities related to long-term contracts are included in current assets and current liabilities in the accompanying balance sheets, as they will be liquidated in the normal course of the contract completion. The contract assets for the years ending December 31, 2025, and 2024, was $2,630,561 and $1,213,614, respectively. The contract liability for the years ended December 31, 2025, and 2024, was $383,869 and $633,794 respectively. We recognized $1,143,269 and $2,561,828 as revenue from our contract liability balance at the beginning of the year at year end December 31, 2025 and 2024, respectively. The allowance for doubtful accounts was $135,236 as of December 31, 2025 and December 31, 2024. The contract receivable balance was $9,243,354 as of December 31, 2025 and $3,047,255 as of December 31, 2024.