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Construction Joint Ventures | 9 Months Ended
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Sep. 30, 2022
Equity Method Investments and Joint Ventures [Abstract] |
Construction Joint Ventures |
6. | CONSTRUCTION JOINT VENTURES
Joint Ventures with a Controlling Interest—We consolidate any venture that is determined to be a VIE for which we are the primary beneficiary, or which we otherwise effectively control. The equity held by the remaining owners and their portions of net income (loss) are reflected in stockholders’ equity on the Condensed Consolidated Balance Sheets line item “Noncontrolling interests” and in the Condensed Consolidated Statements of Operations line item “Net income attributable to noncontrolling interests,” respectively. The Company determined that a joint venture in which the Company’s Ralph L. Wadsworth Construction subsidiary is a 51% owner is a VIE and the Company is the primary beneficiary. Summary financial information for this construction joint venture is as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Revenues | $ | 16,544 |  |  | $ | 19,846 |  |  | $ | 37,006 |  |  | $ | 37,412 |
Operating income | $ | 1,285 |  |  | $ | 1,290 |  |  | $ | 2,673 |  |  | $ | 4,430 |
Net income | $ | 1,294 |  |  | $ | 1,292 |  |  | $ | 2,688 |  |  | $ | 4,435 |
Joint Ventures with a Noncontrolling Interest—The Company accounts for unconsolidated joint ventures using a pro-rata basis in the Condensed Consolidated Statements of Operations and as a single line item (“Receivables from and equity in construction joint ventures”) in the Condensed Consolidated Balance Sheets. This method is a permissible modification of the equity method of accounting which is a common practice in the construction industry. Combined financial amounts of joint ventures in which the Company has a noncontrolling interest and the Company’s share of such amounts which are included in the Company’s Condensed Consolidated Financial Statements are shown below:
| September 30, 2022 |  | December 31, 2021
Current assets | $ | 111,871 |  |  | $ | 130,898 |
Current liabilities | $ | (67,924) |  |  | $ | (91,121) |
Sterling’s receivables from and equity in construction joint ventures | $ | 16,316 |  |  | $ | 16,896 |
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Revenues | $ | 48,543 |  |  | $ | 69,116 |  |  | $ | 165,020 |  |  | $ | 181,022 |
Income before tax | $ | 4,292 |  |  | $ | 9,311 |  |  | $ | 18,636 |  |  | $ | 22,726 |
Sterling’s noncontrolling interest: |  |  |  |  |  |  |
Revenues | $ | 20,778 |  |  | $ | 30,326 |  |  | $ | 71,356 |  |  | $ | 79,264 |
Income before tax | $ | 1,760 |  |  | $ | 4,149 |  |  | $ | 7,775 |  |  | $ | 9,959 |
The caption “Receivables from and equity in construction joint ventures” includes undistributed earnings and receivables owed to the Company. Undistributed earnings are typically released to the joint venture partners after the customer accepts the project as completed and the warranty period, if any, has passed. Other—The use of joint ventures exposes us to a number of risks, including the risk that our partners may be unable or unwilling to provide their share of capital investment to fund the operations of the venture or complete their obligations to us, the venture, or ultimately, the customer. Differences in opinions or views among joint venture partners could also result in delayed decision-making or failure to agree on material issues, which could adversely affect the business and operations of the joint venture. In addition, agreement terms may subject us to joint and several liability for our venture partners, and the failure of our venture partners to perform their obligations could impose additional performance and financial obligations on us. The aforementioned factors could result in unanticipated costs to complete the projects, liquidated damages or contract disputes, including claims against our partners.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI https://asc.fasb.org/topic&trid=2196965 + Details
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