Section 247.49. Current liability accounts.

All of the following current liability accounts that are payable within 1 year will be used by the prequalification committee in determining the net working capital of a bidder:

(a)  Notes payable to banks.

(b)  Notes or contracts payable on construction equipment, except notes due officers, employees, affiliated companies, and any related parties.

(c)   Accounts payable to subcontractors and trade accounts, except accounts payable to officers, employees, affiliated companies, and any related parties.

(d)  Accrued expenses as follows:

(i)   Include wages, payroll taxes, and fringe benefits.

(ii)     Exclude  interest  payable  to   officers,   employees,   affiliated companies, and any related parties.

(e)   Taxes as follows:

(i)   Federal income tax liability, including  taxes  applicable  to   income arising from conversion to the percentage of completion method.

(ii)    State of Michigan income taxes, including taxes applicable to  income arising from conversion to the percentage of completion method.

(iii)   All other taxes.

(f)  ) Pension and profit sharing contributions payable.

(g)   Billings on uncompleted contracts in excess of related costs.

(h)   Current portions of mortgages payable.

(i)   Other liabilities payable within 1 year.  The bidder shall provide a description of each such other liability.

(j)   Long-term unsecured liabilities as follows:

(i)   An unsecured long-term liability shall be accompanied by a signed statement from the lender and the bidder indicating that a decrease in the long-term unsecured borrowing    shall    be    reported    to  the    prequalification committee immediately.  In

addition, the statement from the lender shall disclose the date of the loan, the termination date, a statement disclosing any conditions and whether it is interest or non- interest bearing. A note in the audited financial statement detailing  the   obligations related to construction equipment may be accepted by the prequalification committee in place of the signed statement, if the note is found to contain sufficient detail.

(ii)     If a review of the statement or note as specified in paragraph (i) of this subdivision reveals that the unsecured liability could be payable within 1 year, it may be treated as a current liability for prequalification rating purposes. An unsecured long-term liability that is not accompanied by a statement or note as specified in paragraph (i) of this subdivision shall be considered a current liability for prequalification rating purposes.

History: 1979 AC; 2002 AACS; 2009 AACS.