Ameresco, Inc. Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2026

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Our accounting policies are set forth in Note 2 to the consolidated financial statements contained in our 2025 Form 10-K. We have included certain updates to those policies below.

Correction of an Error - Neogenyx Fuels LLC Non-controlling Interest (“NCI”)

On May 4, 2026, we entered into a contribution and equity purchase agreement with an affiliate of HA Sustainable Infrastructure Capital and an affiliate thereof (“HASI”) to combine our biogas business into a new joint venture, Neogenyx Fuels LLC (“Neogenyx Transaction”). At closing on May 12, 2026, we contributed our existing biogas operations and related assets and liabilities in exchange for a 70% equity interest, while HASI acquired a 30% interest through a $400,000 cash commitment.

Subsequent to the Q2 2026 Form 10-Q filing, management further evaluated the accounting of the Neogenyx Transaction, and determined that the initial non-controlling interest measurement should reflect the amount that would be attributable to the Class B investor in a hypothetical liquidation of Neogenyx at book value immediately after closing of the transaction instead of as historically recorded using this simple ownership calculation. Applying that methodology resulted in a correction to the initial non-controlling interest of $241,799, compared with the $60,032 that was originally recorded in the second quarter of 2026. The correction of this error was made in Q3 2026 and has been reflected in the Q3 2026 financial statements. The resulting effect on starting balances for the third quarter 2026 correction increased noncontrolling interests by approximately $181,767, removed approximately $179 from accumulated other comprehensive income, and reduced additional paid-in capital by approximately $181,946 as shown in the tables below:


	June 30, 2026
Balance Sheet Line Items	Original Amount		Adjustment		As Revised
Stockholders’ equity:
Preferred stock, $0.0001 par value	$	—	$	—	$	—
Class A common stock, $0.0001 par value	3		—		3
Class B common stock, $0.0001 par value	2		—		2
Additional paid-in capital	565,164		(181,946)		383,218
Retained earnings	688,126		—		688,126
Accumulated other comprehensive loss, net	(4,766)		179		(4,587)
Treasury stock, at cost	(11,788)		—		(11,788)
Non-controlling interests	114,353		181,767		296,120
Total stockholders’ equity	$	1,351,094	$	—	$	1,351,094


	For the Three and Six Months Ended June 30, 2026
Statement of Changes in Redeemable Non-Controlling Interests and Stockholders' Equity Line Items	Original Amount		Adjustment		As Revised
Additional paid-in capital:
Contributions from NCI, net of income tax effect	$	159,069	$	(181,946)	$	(22,877)
End of period	$	565,164	$	(181,946)	$	383,218

Accumulated other comprehensive loss, net:
Contributions from NCI, net of income tax effect	$	(179)	$	179	$	—
End of period	$	(4,766)	$	179	$	(4,587)

Non-controlling interests:
Contributions from NCI, net of income tax effect	$	60,032	$	181,767	$	241,799
End of period	$	114,353	$	181,767	$	296,120

Change in Accounting Method - Investment Tax Credits for Energy Assets

During the interim period ended September 30, 2026, the Company elected, effective January 1, 2026, to change our method of accounting for nonrefundable, transferable investment tax credits (“ITCs”) associated with our energy assets. Our accounting policy election is to use the flow-through method in recognizing the ITC as a reduction in the income tax provision in the period the credit is generated.

The issuance of Accounting Standards Update (“ASU”) 2025-10, Accounting for Government Grants Received by Business Entities, together with evolving U.S. GAAP interpretive guidance, varying market practices, emerging accounting firm views on transferable tax credits, and the Financial Accounting Standards Board’s (“FASB”) separate standard-setting project evaluating the accounting for transferable tax credits, prompted management to reassess whether its historical accounting policy remains the most preferable accounting model under ASC 250. In that reassessment, management evaluated whether accounting for nonrefundable transferable ITCs within an ASC 740 framework better reflects the underlying economics of the credits and more appropriately reflects how the benefits of those credits are realized.

Historically, we accounted for transferable ITCs sold to third parties by analogy to International Accounting Standard (“IAS”) 20, Accounting for Government Grants. Management initially selected that approach because no specific U.S. GAAP guidance directly addressed the accounting by a transferor for nonrefundable transferable ITCs, and the credits were viewed as government incentives associated with the construction and operation of qualifying renewable energy assets. Under that model, the tax credits were recognized as a reduction to the cost basis of the related energy asset when it was probable that we would satisfy the applicable conditions and realize the credits, which resulted in lower depreciation expense recognized over the useful lives of

those assets. We determined that it is preferable to recognize the ITCs in our tax provision as these transactions have tax attributes that more closely align with guidance under ASC 740, Income Taxes related to the timing of realization for associated tax attributes. Under the flow-through method, the benefit of the ITCs is recognized as a reduction to income tax expense in the period in which the ITCs arise and are included in the Company’s income tax provision, subject to the applicable recognition and realization requirements of ASC 740. We believe it is preferable not to analogize to IAS 20, as recognizing the benefit over the life of the energy assets essentially defers the benefit that is not substantive. The flow-through method election aligns the accounting treatment for credits we intend to sell and those we intend to use.

Comparative financial statements of prior periods have been adjusted to apply the new method retrospectively. As a result of this change, retained earnings at January 1, 2026 increased by $187,987. See Note 19 for additional disclosures.

Accounts Receivable and Allowance for Credit Losses

Changes in the allowance for credit losses are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Allowance for credit losses, beginning of period	$	864	$	858	$	869	$	845
Charges (recoveries) to costs and expenses, net	(12)		180		(1)		189
Account write-offs and other	(1)		(16)		(17)		(12)
Allowance for credit losses, end of period	$	851	$	1,022	$	851	$	1,022

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist primarily of other receivables, deferred project costs, and other short-term prepaid expenditures that will be expensed within one year.

Prepaid expenses and other current assets are comprised of the following:


	September 30, 2026		December 31, 2025
			As Adjusted
Other receivables	$	49,302	$	91,205
Deferred project costs	168,298		153,199
Prepaid expenses	18,697		16,284
Prepaid expenses and other current assets	$	236,297	$	260,688

Other Assets

Other assets include $10,000 in deposits paid to Powin LLC, one of our battery energy storage system suppliers, who filed for Chapter 11 bankruptcy protection on June 10, 2025. See Note 10 Commitments and Contingencies for additional information.

Recent Accounting Pronouncements

Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, to improve the disclosures by requiring more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A, and research and development). ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), to modify the effective date previously stated in ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact that adopting ASU 2024-03 would have on our condensed consolidated financial statements and will adhere to the clarified effective date in ASU 2025-01 if implementation is necessary.

Business Combinations (Topic 805) and Consolidation (Topic 810) - Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810) - Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity to enhance the ability to compare business combinations that do and do not involve variable interest entities by identifying the accounting acquirer. ASU 2025-03 is effective for fiscal years beginning after December 15, 2026, including interim reporting periods within those fiscal years. We are currently evaluating the impact that adopting this new accounting standard would have on our condensed consolidated financial statements.

Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses for Accounts Receivable and Contract Assets to address challenges encountered when applying the guidance in Topic 326, Financial Instruments—Credit Losses, to current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, Revenue from Contracts with Customers. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years. We adopted this new accounting standard effective January 1, 2026 and the adoption did not have a material impact on our condensed consolidated financial statements.

Derivatives and Hedging (Topic 815) - Hedge Accounting Improvements

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815) - Hedge Accounting Improvements to clarify certain aspects of the guidance on hedge accounting and to address several incremental hedge accounting issues arising from the global reference rate reform initiative. ASU 2025-09 is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years. We are currently evaluating the impact that adopting this new accounting standard would have on our condensed consolidated financial statements.

Accounting for Government Grants Received by Business Entities

In December 2025, the FASB issued ASU 2025-10, Accounting for Government Grants Received by Business Entities to establish guidance on the recognition, measurement, and presentation of government grants received by business entities. ASU 2025-10 is effective for fiscal years beginning after December 15, 2028, including interim periods with those fiscal years. We are currently evaluating the impact that adopting this new accounting standard would have on our condensed consolidated financial statements.

Interim Reporting (Topic 270) - Narrow-Scope Improvements

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) - Narrow-Scope Improvements to improve the guidance in Topic 270, Interim Reporting, by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable. ASU 2025-11 is effective for interim periods within fiscal years beginning after December 15, 2027. We are currently evaluating the impact that adopting this new accounting standard would have on our condensed consolidated financial statements.

Codification Improvements

In December 2025, the FASB issued ASU 2025-12, Codification Improvements to address suggestions received from stakeholders on the Accounting Standards Codification and to make other incremental improvements to GAAP. ASU 2025-12 is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years. We are currently evaluating the impact that adopting this new accounting standard would have on our condensed consolidated financial statements.

Environmental Credits and Environmental Credit Obligations (Topic 818)

In May 2026, the FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818) to improve the financial accounting for and disclosure of environmental credits and environmental credit obligations. ASU 2026-02 is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. We are currently evaluating the impact that adopting this new accounting standard would have on our condensed consolidated financial statements.