Constructor's guaranties and sureties

Guaranties and sureties assumed by a construction corporation to be posted below the line or disclosed in the notes to its financial statements. These include: classical forms of guaranty/ surety in the construction business, such as advance payment bonds, performance bonds (guaranteeing fulfillment of contract) and warranties. Other guaranties posted to safeguard the operations of subsidiaries, or operations outside the sphere of classic construction activity. The growing requirement for guaranties and sureties reflects the changing overall environment in the construction industry. Increasingly, traditional domestic construction operations are being complemented by business in other countries, by real estate development and by other project development activities. It has become more and more important for construction companies to obtain appropriate guaranties or sureties to secure their clients´ obligations.