Jack encourages Sarah not to worry about the market fluctuations. Although he has signed and committed to purchase orders at very high prices, he is optimistic that the lumber market will level off and that prices will return to normal. He understands profit recognition for construction contractors but encourages Sarah to keep her work-in-process schedules based on original estimates for a few months. He tells her, “Revenue recognition is based on management judgment, and everyone will understand if we don’t disclose the problem immediately.” Jack is confident that there will be enough low-priced lumber by the end of the year (to generate income on later projects) that will be more than sufficient to offset the losses from the current projects in process. He reminds her that he has many years of experience in the construction industry and that she should trust his judgment.