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2. Petitioner's Expert Witnesses
a. Description of the Testimony
Petitioner called Denton R. Hammond (Hammond) and Gross as
expert witnesses. Respondent called no expert witnesses.
Hammond and Gross are certified public accountants. Hammond
specializes in construction industry accounting. Gross prepared
Eagle’s tax returns for the years at issue in this case and
conducted the study relating to Eagle’s deposits.
Hammond and Gross concluded that: (i) Eagle accounted for
payments it received from customers for panelized house kits
consistently for both financial and tax purposes, (ii) the method
of accounting Eagle used for tax purposes conformed to its books
and records and its issued financial statements, (iii) Eagle's
method of accounting properly matches income and expenses for
financial accounting purposes, and (iv) Eagle's method of
accounting complies with GAAP.
Hammond also concluded that Eagle's method of accounting
clearly reflects its income for the years in issue, is as
accurate in reporting the results of operations as accounting
systems allow, and complies with GAAP as provided in the AICPA’s
Statement of Position 81-1, “Accounting for Performance of
Construction-Type and Certain Production-Type Contracts”. He
also concluded that respondent's method mismatches items of
revenue and expense under GAAP.
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