Topic 4B: Developer Fee Elimination During Consolidation or Combination
|
|
- Cory Sharp
- 5 years ago
- Views:
Transcription
1 Analysis/Input GAAP There are two approaches to eliminating developer fee income in financial statements that consolidate or combine the developer that earns the fee and a property that capitalizes the fee. First Approach: Elimination of All Inter-Company Profits Many accountants cite the guidance found in Accounting Research Bulletin (ARB) 51, Consolidated Financial Statements, which generally requires all inter-organization balances and transactions to be eliminated. This is done so that the resulting financial statements present the financial position and operating results of the reporting organization and all of its controlled entities as if they were a single enterprise. Such an enterprise cannot create profits through transactions with itself. ARB 51 also states that when eliminating intercompany profits on assets remaining within the consolidated group, the concept usually applied is elimination of the gross profit (or loss). The existence of minority (or noncontrolling) interests, such as limited partners, should not impact the amount of the gross profit to be eliminated. This is because of an underlying assumption that the consolidated statements represent the financial position and operating results of a single business enterprise. Such accountants also cite FAS 66, which illustrates several situations wherein a real estate seller should not recognize profit on a real estate transaction, including the following: the seller has an option to repurchase the property or guarantees the net tax benefits to the buyer, or the seller is a general partner in a limited partnership and the seller holds a receivable for a significant portion of the sales price, or the seller controls the limited partnership buyer. Often all three of these conditions are present in developer fee arrangements and SOP 92-1 states that the FAS 66 guidance for real estate sales should be followed when recognizing developer fees, as described in Topic 4a. Since the property incurring a developer fee capitalizes it as part of its property cost, the fee is included in the property s total assets and net equity. The developer also recognizes an asset (cash or receivable) and revenue for the fee as described in Topic 4a. The objective of eliminating the profit portion of the fee is to remove all profits recognized between entities within the consolidated group and to produce the same financial result as if a single business enterprise had constructed the real estate for its own use (and obtained noncontrolling equity as part of its financial structure). To avoid recalculating depreciation at the property level on only the consolidated group s cost portion of the fee, a more efficient way to accomplish the same result can be used. Deferring recognition of the
2 profit portion over the same 40-year life that the property uses to depreciate the property (including the capitalized developer fee) produces the same net effect. Once the profit portion of a developer fee has been deferred in consolidation, the remaining un-deferred portion of the fee represents only the developer s cost. SFAS No. 67, Accounting for Costs and Initial Rental Operations of Real Estate Projects defines project costs that can be capitalized as those direct costs clearly associated with the acquisition, development and construction of a real estate project as well as allocated indirect project costs that clearly relate to a project under development or construction. The developer s costs would include such items as project managers salaries and benefits, allocated overhead and other costs incurred by the developer under the development services contract. Any costs charged to a project in addition to the developer fee are not included. The general and administrative expenses of a developer should be expensed as incurred. The resulting consolidated real property balances after eliminating the profit portion of developer fees should therefore reflect the same property cost that would have been capitalized had the development activity had been carried out by a single business enterprise. To accomplish this objective several steps are needed, including: A. Determine the estimated historical profit portion of developer fees and validate the estimate s accuracy annually for future reporting periods; B. Eliminate the historical developer fee profit from net assets at the beginning of the first consolidated reporting period, net of accumulated depreciation recorded by consolidated group organizations; C. Eliminate the current year development fee revenue, costs and defer recognition of the gross profit; and D. Amortize the deferred gross profit over the same period as the consolidated group organizations depreciate the property. A. Determine the estimated historical profit portion of developer fees and validate annually Organizations implementing the consolidation requirement for the first time will find it challenging to estimate how much of the developer fees capitalized by affiliated partnerships and corporations since the developer s inception represent gross profit needing to be eliminated. It is helpful to use historical records to determine what the percentage relationship was between the (direct and indirect) costs incurred to develop a sample of properties compared with the developer fee capitalized by those properties. Records that capture costs attributable to each development services agreement may not exist since developers often handle many projects simultaneously. In such cases only annual developer fee revenue and historical development department expenditures are available. Since most developments take many years to complete, a reasonable estimate will involve comparing annual developer fee revenue to direct and indirect development expenditures related to the development services performed for at least a fiveyear period. 2
3 Costs associated with capitalizing affiliates should not be included in this calculation since those costs are ultimately eliminated in consolidation. Developer fees may vary in amount from zero (e.g. for older HUD projects) to several million dollars (e.g. for newer TCAC projects). The sample of properties used to estimate an average profit portion for developer fees should represent a mix of property types similar to the mix in the entire portfolio of consolidated entities. For a larger developer with dozens of properties, a reasonable estimate of this profit will suffice, since obtaining an exact calculation is not practicable. Once an estimate of the profit portion of the developer fee is made (e.g. 30%), the estimate can be used until circumstances change. Monitoring an annual or rolling five-year average of this estimate will identify when it needs to be updated. A disclosure should be made in the financial statement notes regarding the nature of this estimate and its susceptibility to change. B. Eliminate the profit portion at the beginning of the first reporting period The inter-organizational developer fee gross profit remaining in the opening net assets of the consolidated financial statements, prior to elimination, is only that portion of the developer fee that has not yet been depreciated by the consolidated group entities. Generally developer fees are capitalized as part of a building, which has a 40-year estimated useful life for GAAP purposes. Using a spreadsheet listing all consolidated properties by date placed in service, the accumulated depreciation of the developer fee profit can be calculated as of the beginning of the first consolidated reporting period. There is no need to eliminate this depreciated portion of the developer fee profit since the consolidated accumulated net asset opening balance reflects prior year recognition of both the fee and the depreciation expense, netting to zero. However, the remaining un-depreciated portion of the developer fee profit must be removed from the consolidated entity s beginning net asset balance through an elimination entry. The amount removed from net assets is deferred and amortized over the remaining depreciable life of each property. Two approaches for presenting the amount of deferred profit on developer fees are available: either reducing the consolidated property asset account balance (since the analysis above indicates that such balance is otherwise overstated by this inter-organizational gross profit), or reporting the balance as deferred developer fee revenue (a liability). C. Eliminate the current year activity Since the objective is to report development activity as if conducted by a single business enterprise, current year developer fee income should also be eliminated during consolidation. Similarly, current year direct and indirect development expenses associated with earning the developer fee should be eliminated. Such expenses are reflected in the cost portion of the developer fee capitalized by the affiliates. 3
4 It is unlikely that the net of these two eliminating entries will represent the expected gross profit percentage in any given year, due to timing issues arising from the developer s policy for recognition of developer fees as well as due to the imperfect nature of the estimated profit percentage. Nevertheless, the net of this elimination entry should also be added to the deferred developer fee account. Once newly developed property is placed in service, amortization of the estimated deferred gross profit begins. Until that time, the deferred developer fee account will also contain some balances attributable to projects still in development. D. Amortize the deferred developer fee gross profit The amortization of each property s deferred developer fee gross profit should match the estimated useful life that the entity which capitalized that fee uses to depreciate its property. The same spreadsheet listing all properties by date placed in service can be used to track the annual amortization of the deferred developer fee gross profit. Two approaches also exist for recognizing each year s amortization of such deferred revenue and selection of the appropriate choice will depend on which approach was selected for reporting the deferred profit on the balance sheet. If the deferred revenue is reported as a reduction of the property account balance, the amortization of that deferred revenue should reduce consolidated depreciation expense. Conversely, if a deferred revenue liability is reported, the amortization of that balance should result in developer fee income. Under either approach the consolidated effect is to match the developer s recognition of developer fee profits with the affiliate s recognition of depreciation expense on such inter-organizational profits. Also, under either approach the consolidated effect is to capitalize the direct and indirect development costs, as described in SFAS 67, that were incurred by the consolidated entity other than through interorganizational transactions. When allocating net income between controlling and noncontrolling interests, eliminating entries are often allocated so as to produce no impact on the noncontrolling share of equity. Thus, limited partnership interests as reported to investors will equal the amount of noncontrolling equity on the consolidated financial statements. An illustration of this approach, based on the same facts as Example 1 in Topic 4a appears as Example 1 for this topic. Second Approach: Treat developer fee as a partial real estate sale to the limited partner Other accountants cite the sections of SOP 92-1 and FAS 66 that describe partial sales of real estate. Such sections illustrate accounting for the transfer of real estate from a partner to a partnership in which it holds a partial interest, as long as certain forms of continuing involvement or control are not maintained. Gain on sale of real estate is to be recognized by a seller (developer) based on the 4
5 proportion of the outside interests in the buyer (limited partnership). Such accountants maintain that paragraph 34 of FAS 66, which states that when the seller controls the buyer no profit shall be recognized, does not apply to general partners who control limited partnerships. Such accountants make a distinction between the developer fees paid out of capital contributions from investment limited partners versus deferred developer fees to be paid out of project operations. To the extent that developer fees are paid by investors, they are recognized as income and not eliminated. Unpaid fees are removed from the depreciable property balance and any corresponding depreciation expense is reversed. An illustration of this approach, based on the same facts as Example 1, appears as Example 2 for this topic. CFO Group Input The CFO group includes proponents of both approaches, although the majority uses the first method (eliminating all intercompany transactions). A comparison of the resulting net assets for each method in Examples 1 and 2 reflect an immaterial difference. However different fact patterns could produce a larger disparity. Neither method will always produce more net assets for the reporting entity, since the impact of the second method (recognizing a developer fee to the extent of cash received) on net assets will vary depending on the magnitude of the deferred portion of the fee. Although the second method results in a quicker recognition of the entire developer fee (since the deferred developer fee will always be paid within 15 years whereas the first method amortizes the profit portion of the fee over 40 years), some members of the CFO group were concerned that the second method appears to contradict paragraph 34 of FAS 66: If the seller owns a noncontrolling interest in the buyer, the seller should recognize profit in proportion to the outside ownership of the buyer. If the seller owns a controlling interest in the buyer, no profit should be recognized until it is realized through either (1) sale to an independent party or (2) profits from continuing operations. Additionally, some members of the CFO group prefer the first method because it is consistent with the approach used for elimination of developer fees earned from non-partnership affiliates. Whichever method is selected, it is important that organizations disclose their accounting policy for developer fee recognition and eliminations in their financial statement notes. 5
6 APPLICABLE AUTHORITATIVE PRONOUNCEMENTS ARB 51, Consolidated Financial Statements SFAS 67, Accounting for Costs and Initial Rental Operations of Real Estate Projects Statement of Position 92-1 Accounting for Real Estate Syndication Income SFAS 66, Accounting for Sales of Real Estate Acknowledgements STRENGTH MATTERS gratefully acknowledges the work of staff from Novogradac and Company LLP, The Reznick Group, and Lindquist, von Husen & Joyce LLP and the following individuals that contributed to this paper: Allison Clark, The John D. and Catherine T. MacArthur Foundation, Chicago, IL Vince Dodds, Mercy Housing, Inc., Denver, CO Caroline Horton, AEON, Minneapolis, MN Joe Kasberg, National Church Residences, Columbus, OH Michael Kurtz, Common Ground, New York, NY Jeff Reed, Community Housing Partners Corporation, Christiansburg, VA Harry Thompson, Community Preservation & Development Corporation, Washington, DC D Valentine, BRIDGE Housing, San Francisco, CA Mary White Vasys, Vasys Consulting Ltd, Chicago, IL Laura Vennard, Preservation of Affordable Housing, Inc., Boston, MA Last Updated April 16, 2010 DISCLAIMER This paper contains certain recommended financial reporting best practices for nonprofit affordable housing organizations that develop and own affordable housing in the United States. This paper was developed by a working group comprised of chief financial officers from certain leading nonprofit affordable housing organizations active in the networks of NeighborWorks America, Housing Partnership Network and Stewards of Affordable Housing for the Future, as well as representatives of socially responsible lenders, working in conjunction with representatives from Novogradac and Company LLP, The Reznick Group, and Lindquist, von Husen & Joyce LLP, three independent public accounting firms. This publication should not be construed as accounting or other advice on any specific facts or circumstances. The contents of this paper are intended for general informational purposes only, and you are urged to consult your accountants and other professional advisors concerning your specific situation and any financial reporting or accounting questions you may have. For further information, contact info@strengthmatters.net. 6
7 7
8 8
9 9
10 10
Topic 4A: Developer Fee Recognition. Issue: Developer Fee Recognition for Unconsolidated Developers. Analysis/Input GAAP
Issue: Developer Fee Recognition for Unconsolidated Developers Analysis/Input GAAP Revenue represents the actual or expected cash inflow from sales of an entity's core products or services. For transactions
More informationPresentation of Financial Statement Disclosures Affiliate Relationships
Discussion What financial statement disclosure format is the most useful to lenders and other financial statement readers for disclosing information about a not-for-profit affordable housing developer
More informationTopic 16K: Presentation of Financial Statement Disclosures Subsequent Events Disclosure
Discussion What footnote format is the most useful to lenders and other financial statement readers for disclosing information about a not-for-profit organization s subsequent events? GAAP Requirements
More informationEN Official Journal of the European Union L 320/373
29.11.2008 EN Official Journal of the European Union L 320/373 INTERNATIONAL FINANCIAL REPORTING STANDARD 3 Business combinations OBJECTIVE 1 The objective of this IFRS is to specify the financial reporting
More informationFASB Emerging Issues Task Force
EITF Issue No. 09-4 FASB Emerging Issues Task Force Issue No. 09-4 Title: Seller Accounting for Contingent Consideration Document: Issue Summary No. 1, Supplement No. 1 Date prepared: August 21, 2009 FASB
More informationORIGINAL PRONOUNCEMENTS
Financial Accounting Standards Board ORIGINAL PRONOUNCEMENTS AS AMENDED Statement of Financial Accounting Standards No. 142 Goodwill and Other Intangible Assets Copyright 2008 by Financial Accounting Standards
More informationWhite Paper on Adjusted Cashflow From Operations (ACFO) for IFRS. February, 2018
White Paper on Adjusted Cashflow From Operations (ACFO) for IFRS February, 2018 Copyright REALPAC is the owner of all copyright in this publication. All rights reserved. No part of this document may be
More informationBusiness Combinations
Business Combinations Indian Accounting Standard (Ind AS) 103 Business Combinations Contents Paragraphs OBJECTIVE 1 SCOPE 2 IDENTIFYING A BUSINESS COMBINATION 3 THE ACQUISITION METHOD 4 53 Identifying
More informationORIGINAL PRONOUNCEMENTS
Financial Accounting Standards Board ORIGINAL PRONOUNCEMENTS AS AMENDED Statement of Financial Accounting Standards No. 142 Goodwill and Other Intangible Assets Copyright 2010 by Financial Accounting Foundation.
More informationCFA Level 1. Financial Reporting and Analysis. Non-current Liabilities
CFA Level 1 Financial Reporting and Analysis Non-current Liabilities 2011, Associate Professor Ole Sørensen, Ph.d. Side 1 Coupon Bonds Promises two types of payments: periodic interest payments and a lumpsum
More informationSTAG INDUSTRIAL ANNOUNCES SECOND QUARTER 2018 RESULTS
STAG INDUSTRIAL ANNOUNCES SECOND QUARTER 2018 RESULTS Boston, MA July 31, 2018 - STAG Industrial, Inc. (the Company ) (NYSE:STAG), today announced its financial and operating results for the quarter ended
More information.01 The objective of this Standard is to prescribe the accounting treatment for investment property and related disclosure requirements.
COMPARISON OF GRAP 16 WITH IAS 40 GRAP 16 IAS 40 DIFFERENCES Objective.01 The objective of this Standard is to prescribe the accounting treatment for investment property and related disclosure requirements.
More informationSECURITIES AND EXCHANGE COMMISSION. Washington, D.C FORM 8-K CURRENT REPORT
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported):
More informationSri Lanka Accounting Standard LKAS 40. Investment Property
Sri Lanka Accounting Standard LKAS 40 Investment Property LKAS 40 CONTENTS SRI LANKA ACCOUNTING STANDARD LKAS 40 INVESTMENT PROPERTY paragraphs OBJECTIVE 1 SCOPE 2 DEFINITIONS 5 CLASSIFICATION OF PROPERTY
More informationAnalysing lessee financial statements and Non-GAAP performance measures
February 2019 IFRS Foundation The Essentials Issue No. 5 Analysing lessee financial statements and Non-GAAP performance measures Introduction Investors and company managers generally view free cash flow
More informationReal Estate Syndication Income 19,451 NOTE
Real Estate Syndication Income 19,451 Section 10,500 Statement of Position 92-1 Accounting for Real Estate Syndication Income February 6, 1992 NOTE Statements of Position of the Accounting Standards Division
More informationASSURANCE AND ACCOUNTING ASPE - IFRS: A Comparison Investment Property
ASSURANCE AND ACCOUNTING ASPE - IFRS: A Comparison Investment Property In this publication we will examine the key differences between Accounting Standards for Private Enterprises (ASPE) and International
More informationUNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC FORM 8-K/A
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event
More informationLeases: Overview of the new guidance
Leases: Overview of the new guidance Prepared by: Richard Stuart, Partner, National Professional Standards Group, RSM US LLP richard.stuart@rsmus.com, +1 203 905 5027 March 2, 2016 Introduction On February
More informationNAREIT/REALpac Impact of Revenue Recognition Proposal on Accounting for Real Estate Sales
RR Memo 130B ES April 28, 2010 BM May 5, 2010 NAREIT/REALpac Impact of Revenue Recognition Proposal on Accounting for Real Estate Sales Financial Accounting Standards Board April 28, 2010 Agenda 1. REESA
More informationEITF ABSTRACTS. Title: Applying the Conditions in Paragraph 42 of FASB Statement No. 144 in Determining Whether to Report Discontinued Operations
EITF ABSTRACTS Title: Applying the Conditions in Paragraph 42 of FASB Statement No. 144 in Determining Whether to Report Discontinued Operations Issue No. 03-13 Dates Discussed: November 12 13, 2003; March
More informationWHITE PAPER ON FUNDS FROM OPERATIONS
WHITE PAPER ON FUNDS FROM OPERATIONS FOR IFRS REVISED: SEPTEMBER 2010 Page 1 of 17 I. Introduction and Background TABLE OF CONTENTS II. III. IV. Intended use of FFO FFO Definition Discussion of FFO Definition
More informationDefinitions. CPI is a lease in which base rent is adjusted based on changes in a consumer price index.
Annualized Rental Income is rental revenue under our leases on Operating Properties on a straight-line basis, which includes the effect of rent escalations and any tenant concessions, such as free rent,
More informationWP Glimcher Reports Second Quarter 2016 Results
NEWS RELEASE WP Glimcher Reports Second Quarter 2016 Results COLUMBUS, OH August 3, 2016 WP Glimcher Inc. (NYSE: WPG) today reported financial and operating results for the second quarter ended June 30,
More informationIntangibles Goodwill and Other (Topic 350), Business Combinations (Topic 805), and Not-for-Profit Entities (Topic 958)
Proposed Accounting Standards Update Issued: December 20, 2018 Comments Due: February 18, 2019 Intangibles Goodwill and Other (Topic 350), Business Combinations (Topic 805), and Not-for-Profit Entities
More informationFASB and IASB Continue Making Decisions on Lease Accounting
Accounting Journal Entry FASB and IASB Continue Making Decisions on Lease Accounting March 28, 2011 At recent meetings, the FASB and IASB (the boards ) have continued to make progress on the leases project,
More informationFASB Emerging Issues Task Force. Issue No Title: Accounting by Lessees for Maintenance Deposits under Lease Arrangements
EITF Issue No. 08-3 FASB Emerging Issues Task Force Issue No. 08-3 Title: Accounting by Lessees for Maintenance Deposits under Lease Arrangements Document: Issue Summary No. 1, Supplement No. 1 Date prepared:
More informationExposure Draft. Accounting Standard (AS) 40 Investment Property. Last date for the comments: November 10, 2018
Exposure Draft Accounting Standard (AS) 40 Investment Property Last date for the comments: November 10, 2018 Issued by Accounting Standards Board The Institute of Chartered Accountants of India 1 Exposure
More informationTopic 842 Technical Corrections Summary of Comments Received
Contact(s) David Hoyer Co-Author Ext. 462 Andy Bologna Co-Author Ext. 356 Thomas Faineteau Co-Author Ext. 362 Chris Roberge Co-Author Ext. 274 Amy Park Co-Author Ext. 476 Shayne Kuhaneck Assistant Director
More informationORIGINAL PRONOUNCEMENTS
Financial Accounting Standards Board ORIGINAL PRONOUNCEMENTS AS AMENDED FASB Technical Bulletin No. 88-1 Issues Relating to Accounting for Leases: Time Pattern of the Physical Use of the Property in an
More informationroots The Substance of the Standard Contents Changes to the Accounting for Goodwill for Private Companies
The Substance of the Standard MAYER HOFFMAN MCCANN P.C. AN INDEPENDENT CPA FIRM TM A publication of the Professional Standards Group February 2014 Changes to the Accounting for Goodwill for Private Companies
More informationINDEPENDENT AUDITORS REPORT 1. Balance Sheets 2. Statements of Operations 3. Statements of Changes in Partners Capital 4. Statements of Cash Flows 5
Sunrise Carlisle, LP Financial Statements as of and for the Years Ended December 31, 2016 and 2015, Other Financial Information, and Independent Auditors Reports TABLE OF CONTENTS INDEPENDENT AUDITORS
More informationFASB Emerging Issues Task Force
EITF Issue No. 03-17 FASB Emerging Issues Task Force Issue No. 03-17 Title: Subsequent Accounting for Executory Contracts That Have Been Recognized on an Entity's Balance Sheet Document: Issue Summary
More informationSAUL CENTERS, INC Wisconsin Avenue, Suite 1500, Bethesda, Maryland (301)
SAUL CENTERS, INC. 7501 Wisconsin Avenue, Suite 1500, Bethesda, Maryland 20814-6522 (301) 986-6200 October 29, 2015, Bethesda, MD. Saul Centers, Inc. Reports Third Quarter 2015 Earnings Saul Centers, Inc.
More informationIFRS - 3. Business Combinations. By:
IFRS - 3 Business Combinations Objective 1. The purpose of this IFRS is to specify to disclose financial information by an entity when carrying out a business combination. In particular, specifies that
More informationEXECUTIVE SUMMARY A GUIDE TO ACCOUNTING FOR BUSINESS COMBINATIONS
EXECUTIVE SUMMARY A GUIDE TO ACCOUNTING FOR BUSINESS COMBINATIONS This Executive Summary is part of RSM US LLP s A Guide to Accounting for Business Combinations and should be read in conjunction with that
More informationCaptive and Vendor Leasing
Captive and Vendor Leasing Equipment Leasing Association Lease Accountants Conference September 18, 2006 Deborah Brady James S. Brzoska Alan L. Moose Key Equipment Finance IBM Global Financing John Deere
More informationRevenue Recognition v.2.0- Review Questions- Answer Key and Evaluative Feedback
Revenue Recognition v.2.0- Review Questions- Answer Key and Evaluative Feedback CHAPTERS 1-3 1. At which of the following times did the accounting boards choose to allow the entity (i.e. business) to recognize
More informationEdison Electric Institute and American Gas Association New Lease Standard
Edison Electric Institute and American Gas Association New Lease Standard May 16, 2016 Disclaimer The information contained herein is of a general nature and is not intended to address the circumstances
More informationLease & Finance Accountants Conference. September The Westin Charlotte Charlotte, NC
Lease & Finance Accountants Conference September 11-13 The Westin Charlotte Charlotte, NC H A N D O U T S Lessor Accounting under ASC 842 EQUIPMENT LEASING AND FINANCE ASSOCIATION Presenters Rod Hurd Chief
More informationEN Official Journal of the European Union L 320/323
29.11.2008 EN Official Journal of the European Union L 320/323 INTERNATIONAL ACCOUNTING STANDARD 40 Investment property OBJECTIVE 1 The objective of this standard is to prescribe the accounting treatment
More informationCenter for Plain English Accounting AICPA s National A&A Resource Center available exclusively to PCPS members
Report April 19, 2017 Center for Plain English Accounting AICPA s National A&A Resource Center available exclusively to PCPS members Sale-Leaseback Transactions Involving Real Estate Navigating the Twists
More informationBusiness Combinations IFRS 3
CA Sandesh Mundra Business Combinations IFRS 3 For many men, the acquisition of wealth does not end their troubles, it only changes them. - Lucius Annaeus Seneca Lets get some of the basics correct.. We
More informationGuidance Note on Accounting for Real Estate Transactions. Dinesh Jangid
Guidance Note on Accounting for Real Estate Transactions Dinesh Jangid Agenda Background and current accounting practices 2 Background Current accounting is mostly driven by the GN of the Institute of
More informationThis version includes amendments resulting from IFRSs issued up to 31 December 2009.
International Accounting Standard 40 Investment Property This version includes amendments resulting from IFRSs issued up to 31 December 2009. IAS 40 Investment Property was issued by the International
More informationNON-GAAP FINANCIAL MEASURES
NON-GAAP FINANCIAL MEASURES Welltower Inc. (HCN) believes that revenues, net operating income from continuing operations (NOICO), net income and net income attributable to common stockholders (NICS), as
More informationUNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended
More informationNew Accounting Rules for Nonfinancial Asset Sales
On February 22, 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-05, Other Income Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic
More informationBusiness Combinations
International Financial Reporting Standard 3 Business Combinations This version was issued in January 2008. Its effective date is 1 July 2009. It includes amendments resulting from IFRSs issued up to 31
More informationConsolidated Financial Statements of ECOTRUST CANADA. Year ended December 31, 2016
Consolidated Financial Statements of ECOTRUST CANADA KPMG Enterprise TM Metro Tower I 4710 Kingsway, Suite 2400 Burnaby BC V5H 4M2 Canada Telephone (604) 527-3600 Fax (604) 527-3636 INDEPENDENT AUDITORS
More informationIn December 2003 the Board issued a revised IAS 40 as part of its initial agenda of technical projects.
IAS 40 Investment Property In April 2001 the International Accounting Standards Board (the Board) adopted IAS 40 Investment Property, which had originally been issued by the International Accounting Standards
More informationThe Impact of the New Revenue Standard on Real Estate Sales
The Impact of the New Revenue Standard on Real Estate Sales Wing W. Poon Montclair State University In May 2014, the FASB and the IASB jointly issued significantly revised standard on revenue recognition.
More informationIFRS 3 Business Combinations
IFRS 3 Business Combinations 0 Objectives Define a business combination under IFRS 3 (Revised 2008) Describe the steps in applying the acquisition method Explain the recognition and measurement principles
More informationMONITORDAILY SPECIAL REPORT. Lease Accounting Project Update as of May 25, 2011 Prepared by Bill Bosco, Leasing 101
MONITORDAILY SPECIAL REPORT Lease Accounting Project Update as of May 25, 2011 Prepared by Bill Bosco, Leasing 101 The high volume of comment letters (780+) and numerous outreach meetings had common criticisms
More informationLeases. (a) the lease transfers ownership of the asset to the lessee by the end of the lease term.
Leases 1.1. Classification of leases A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease
More informationTechnical Line FASB final guidance
No. 2017-17 29 June 2017 Technical Line FASB final guidance How the new revenue standard affects operating real estate entities In this issue: Overview... 1 Real estate sales... 2 Property management services...
More informationSri Lanka Accounting Standard-LKAS 40. Investment Property
Sri Lanka Accounting Standard-LKAS 40 Investment Property CONTENTS SRI LANKA ACCOUNTING STANDARD-LKAS 40 INVESTMENT PROPERTY paragraphs OBJECTIVE 1 SCOPE 2-4 DEFINITIONS 5-15 RECOGNITION 16-19 MEASUREMENT
More informationSelect Income REIT Announces Second Quarter 2016 Results
FOR IMMEDIATE RELEASE Contact: Christopher Ranjitkar, Director, Investor Relations (617) 796-8320 Select Income REIT Announces Second Quarter 2016 Results Second Quarter Net Income of $0.34 Per Share Second
More informationDefining Issues May 2013, No
Defining Issues May 2013, No. 13-24 FASB and IASB Issue Revised Exposure Drafts on Lease Accounting The FASB and IASB (the Boards) recently issued revised joint exposure drafts (EDs) on proposed changes
More informationAccounting Of Intangible Assets Indian as- 26
IOSR Journal of Business and Management (IOSR-JBM) e-issn: 2278-487X, p-issn: 2319-7668. Volume 16, Issue 2. Ver. II (Feb. 2014), PP 40-45 Accounting Of Intangible Assets Indian as- 26 Manpreet Sharma,
More informationPerry Farm Development Co.
(a not-for-profit corporation) Consolidated Financial Report December 31, 2010 Contents Report Letter 1 Consolidated Financial Statements Balance Sheet 2 Statement of Operations 3 Statement of Changes
More informationSAUL CENTERS, INC Wisconsin Avenue, Suite 1500, Bethesda, Maryland (301)
SAUL CENTERS, INC. 7501 Wisconsin Avenue, Suite 1500, Bethesda, Maryland 20814-6522 (301) 986-6200 Saul Centers, Inc. Reports Third Quarter 2017 Earnings November 2, 2017, Bethesda, MD. Saul Centers, Inc.
More informationBUSINESS COMBINATIONS: CLARIFYING THE DEFINITION OF A BUSINESS
BUSINESS COMBINATIONS: CLARIFYING THE DEFINITION OF A BUSINESS Prepared by: Robert Dombrowski, Partner, National Professional Standards Group, RSM US LLP robert.dombrowski@rsmus.com, +1 847 413 6209 TABLE
More informationTechnical Line FASB final guidance
No. 2018-08 20 September 2018 Technical Line FASB final guidance How the new leases standard affects engineering and construction entities In this issue: Overview... 1 Key considerations... 2 Scope and
More informationCONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTS Dundee Real Estate Investment Trust Consolidated Balance Sheets (unaudited) June 30, December 31, (in thousands of dollars) Note 2004 2003 Assets Rental properties 3,4
More informationBoard Meeting Handout ACCOUNTING FOR CONTINGENCIES September 6, 2007
PURPOSE Board Meeting Handout ACCOUNTING FOR CONTINGENCIES September 6, 2007 At today s meeting, the Board will discuss whether to add to its technical agenda a project considering whether to revise the
More informationThe New Lease Accounting Standard. Hunter Mink, CPA, CCIFP Brian Rosenberg, CPA, MBA
The New Lease Accounting Standard Hunter Mink, CPA, CCIFP Brian Rosenberg, CPA, MBA 1 Agenda Introduction Lease Identification and Classification Lessee Accounting Other Considerations Disclosures Impact
More informationPHILIPPINE INTERPRETATIONS COMMITTEE (PIC) QUESTIONS AND ANSWERS (Q&As)
PHILIPPINE INTERPRETATIONS COMMITTEE (PIC) QUESTIONS AND ANSWERS (Q&As) Q&A No. 2011 06 PFRS 3, Business Combinations (2008), and PAS 40, Investment Property Acquisition of investment properties asset
More informationHONG KONG SOCIETY OF ACCOUNTANTS. Financial Accounting Standards Committee. Urgent Issues & Interpretations Sub-Committee
HONG KONG SOCIETY OF ACCOUNTANTS Financial Accounting Standards Committee Urgent Issues & Interpretations Sub-Committee Interpretation 12 Business combinations - Subsequent adjustment of fair values and
More informationWHITE PAPER ON SUPPLEMENTAL DISCLOSURES FOR REAL ESTATE INVESTMENT AND DEVELOPMENT ENTITIES
WHITE PAPER ON SUPPLEMENTAL DISCLOSURES FOR REAL ESTATE INVESTMENT AND DEVELOPMENT ENTITIES FEBRUARY 10, 2009 I. Introduction II. III. IV. Adjusted Funds From Operations Capital Expenditures TABLE OF CONTENTS
More informationIFRS Training. IAS 38 Intangible Assets. Professional Advisory Services
IFRS Training IAS 38 Intangible Assets Table of Contents Section 1 Overview 2 Introduction to Intangible Assets 3 Recognition and Initial Measurement 4 Internally Generated Intangible Assets 5 Measurement
More informationGASB 69: Government Combinations
GASB 69: Government Combinations Table of Contents EXECUTIVE SUMMARY... 3 BACKGROUND... 3 KEY PROVISIONS... 3 OVERVIEW & SCOPE... 3 MERGER & TRANSFER OF OPERATIONS... 4 Mergers... 4 Transfers of Operations...
More informationCenter for Plain English Accounting AICPA s National A&A Resource Center available exclusively to PCPS members
REPORT February 22, 2017 Center for Plain English Accounting AICPA s National A&A Resource Center available exclusively to PCPS members ASU 2017-04: Goodwill Simplifications Implementation Considerations
More informationWHITE PAPER ON FUNDS FROM OPERATIONS
WHITE PAPER ON FUNDS FROM OPERATIONS FOR IFRS REVISED: NOVEMBER 2012 Page 1 of 16 I. Introduction and Background TABLE OF CONTENTS II. III. IV. Intended use of FFO FFO Definition Discussion of FFO Definition
More informationAMERICAN SOCIETY OF APPRAISERS. Procedural Guidelines. PG-2 Valuation of Partial Ownership Interests
AMERICAN SOCIETY OF APPRAISERS Procedural Guidelines PG-2 Valuation of Partial Ownership Interests I. Preamble A. Business valuation professionals are frequently engaged as independent financial appraisers
More informationTechnical Line FASB final guidance
No. 2016-11 14 April 2016 Technical Line FASB final guidance How the FASB s new leases standard will affect real estate entities In this issue: Overview... 1 Key considerations... 2 Scope and scope exceptions...
More informationEUROPEAN UNION ACCOUNTING RULE 7 PROPERTY, PLANT & EQUIPMENT
EUROPEAN UNION ACCOUNTING RULE 7 PROPERTY, PLANT & EQUIPMENT Page 2 of 10 I N D E X 1. Objective... 3 2. Scope... 3 3. Definitions... 3 4. Recognition... 4 4.1 General recognition principle... 4 4.2 Initial
More informationA guide to. accounting for. Second Edition. Assurance Tax Consulting
A guide to accounting for Business Combinations Second Edition Assurance Tax Consulting A guide to accounting for Business Combinations Second Edition January 2012 This publication is provided as an information
More informationImplementing the New Lease Guidance
Implementing the New Lease Guidance October 22, 2018 2018 Crowe LLP 2018 Crowe LLP Agenda Background Scope Effective dates & transition requirements Lessee accounting model Lessor accounting model Specialized
More informationThe new accounting standard for leases. 27 March 2017
The new accounting standard for leases 27 March 2017 Disclaimer Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity.
More informationAccounting for Tangible Capital Assets
Accounting for Tangible Capital Assets Date Approved by Board: 2011.11.17 Resolution No.: 11-113 2016.05.19 16-048 Lead Role: CFO Replaces: N/A Last Review Date: N/A Next Review Date: 2019.05.19 Policy
More informationDepreciation of Property and Amortization of Leasehold Improvements
Statutory Issue Paper No. 67 Depreciation of Property and Amortization of Leasehold Improvements STATUS Finalized March 16, 1998 Original SSAP and Current Authoritative Guidance: SSAP No. 19 Type of Issue:
More informationTechnical Line FASB final guidance
No. 2019-01 3 January 2019 Technical Line FASB final guidance How the new leases standard affects automotive entities In this issue: Overview... 1 Recent standard setting activity... 2 Key considerations...
More informationSelect Income REIT Announces Second Quarter Results
July 28, 2014 Announces Second Quarter Results Generates Normalized FFO of $0.72 Per Share Increases Rental Rates for New and Renewal Leases by 21% and Hawaii Rent Resets by 30.9% Increases Occupancy to
More informationTAUBMAN CENTERS ISSUES STRONG FIRST QUARTER RESULTS
Taubman Centers, Inc. 200 East Long Lake Road Suite 300 Bloomfield Hills, Michigan 48304-2324 T 248.258.6800 www.taubman.com TAUBMAN CENTERS ISSUES STRONG FIRST QUARTER RESULTS - Comparable Center Net
More informationEITF ABSTRACTS. [Nullified by FIN 46 and FIN 46(R) for entities within the scope of FIN 46 or FIN 46(R)]
EITF ABSTRACTS Issue No. 90-15 Title: Impact of Nonsubstantive Lessors, Residual Value Guarantees, and Other Provisions in Leasing Transactions [Nullified by FIN 46 and FIN 46(R) for entities within the
More informationIn December 2003 the IASB issued a revised IAS 40 as part of its initial agenda of technical projects.
International Accounting Standard 40 Investment Property In April 2001 the International Accounting Standards Board (IASB) adopted IAS 40 Investment Property, which had originally been issued by the International
More informationTechnical Line SEC staff guidance
No. 2013-20 Updated 27 August 2015 Technical Line SEC staff guidance How to apply S-X Rule 3-14 to real estate acquisitions In this issue: Overview... 1 Applicability of Rule 3-14... 2 Measuring significance...
More informationEXPOSURE DRAFT. Hong Kong Accounting Standard 40. Investment Property
EXPOSURE DRAFT Hong Kong Accounting Standard 40 Investment Property 1 Contents Hong Kong Accounting Standard 40 Investment Property paragraphs OBJECTIVE 1 SCOPE 2-4 DEFINITIONS 5-15 RECOGNITION 16-19 MEASUREMENT
More informationAAT Professional Diploma in Accounting
Qualification Number: R486 04 Qualification Technical Information Version 1.1 published 13 June 2016 AAT Professional Diploma in Accounting Qualification Technical Information Units in this qualification
More informationInternational Financial Reporting Standards (IFRS)
FACT SHEET September 2011 IAS 31 Interests in joint ventures (This fact sheet is based on the standard as at 1 January 2011.) Important note: This fact sheet is based on the requirements of the International
More informationHKAS 40 Revised January 2017April Hong Kong Accounting Standard 40. Investment Property
HKAS 40 Revised January 2017April 2017 Hong Kong Accounting Standard 40 Investment Property HKAS 40 COPYRIGHT Copyright 2017 Hong Kong Institute of Certified Public Accountants This Hong Kong Financial
More informationSAUL CENTERS, INC Wisconsin Avenue, Suite 1500, Bethesda, Maryland (301)
SAUL CENTERS, INC. 7501 Wisconsin Avenue, Suite 1500, Bethesda, Maryland 20814-6522 (301) 986-6200 Saul Centers, Inc. Reports Third Quarter 2016 Earnings November 1, 2016, Bethesda, MD. Saul Centers, Inc.
More informationFinancial Accounting Series
Financial Accounting Series NO. 221-C JUNE 2001 Statement of Financial Accounting Standards No. 142 Goodwill and Other Intangible Assets Financial Accounting Standards Board of the Financial Accounting
More informationExecutive Summary. New leases standard Lessees
Executive Summary December 2018 The new leases standard focuses on increased transparency and comparability providing financial statement users with more information about an entity s leasing activities.
More informationLessor Example Performance Obligation Approach
Lessor Example Performance Obligation Approach **Disclaimer The exposure draft received nearly 700 letters of comment through the comment period ended December 15, 2010. There is some expectation that
More informationSECURITIES AND EXCHANGE COMMISSION FORM 424B3. Prospectus filed pursuant to Rule 424(b)(3)
SECURITIES AND EXCHANGE COMMISSION FORM 424B3 Prospectus filed pursuant to Rule 424(b)(3) Filing Date: 2007-06-06 SEC Accession No. 0001104659-07-045689 (HTML Version on secdatabase.com) Inland American
More informationMergers & Acquisitions (Accounting Implications) By N Jayendran
Mergers & Acquisitions (Accounting Implications) By N Jayendran Existing Standards Under previous IGAAP:- AS 14 Accounting for Amalgamation Under Ind AS: Ind AS 103 Business Combination Accounting for
More informationReal estate project costs
Financial reporting developments A comprehensive guide Real estate project costs Revised December 2018 To our clients and other friends The guidance for real estate project costs is contained within Accounting
More informationHeads Up. FASB Draws a Bright Line Through Operating Leases Proposed ASU Revamps Lease. Accounting. The ED, released by the FASB as a proposed
August 17, 2010 Volume 17, Issue 27 Heads Up In This Issue: Background Effective Date In a Nutshell Scope Lessee Accounting Lessor Accounting Presentation and Disclosures Transition The ED, released by
More information