Specialized GAAP – Real Estate Accounting
Specialized Industry Gaap – Real Estate covers the important authoritative pronouncements on GAAP for the specialized real estate industry. This course focuses on financial reporting requirements for real estate project costs (Part I), real estate sales (Part II), and the rental of property (Part III). Part I addresses whether costs associated with real estate projects should be capitalized or charged to expense as incurred. Part II explains how to apply the five-step revenue recognition model on real estate sales under ASC 606 Revenue from Contracts with Customers. Part III discusses how lessors (landlords) and lessees (tenants) account for leased property under ASC 842 Leases. This course also includes specific examples to illustrate the application of these requirements.
Course information
Course No. 7032
Format: Online pdf (76 pages).
Instructional Delivery Method: QAS Self-Study
Prerequisites:Â None
Advance Preparation:None
Level: Overview
CPE Credit: 3.5 hrs.
Field of Study:Â Accounting
Course expiration:Â Â You have one year from date of purchase to complete the course.
Course Revision Date: May 2021
Objectives
- Recognize accounting principles for real estate project costs (capitalization vs. expensed)
- Identify the revenue recognition requirements applied to sales of real estate.
- Recognizes key concepts in lease accounting applied to lessors (landlords) and lessees (tenants)
Course Contents
PART I: REAL ESTATE PROJECT COSTS
General Rules
Acquisition, Development, and Construction Costs
Preacquisition Costs
Property Taxes and Insurance
Amenities
Initial Rental Operations
Costs Incurred to Rent
Costs Incurred to Sell
Costs of Obtaining a Contract
Costs to Fulfill a Contract
Allocation of Capitalized Costs
PART II: REAL ESTATE SALES
General Rules
Five-Step Revenue Recognition Model
Step 1: Identify a Contract
Step 2. Identify the Performance Obligations
Step 3. Determine the Transaction Price
Step 4. Allocate the Transaction Price
Step 5: Recognize Revenue
Real Estate Sales Q&As
Partial Sales
Repurchase Agreements
Forward or Call Option
Put Option
Other Considerations
Combining Contracts
Modifying Contracts
Changes to the Transaction Price
Comprehensive Illustrations: Assessing Whether a Performance Obligation Is Satisfied at a Point in Time or Over Time
Scenario 1: Seller Does Not Have an Enforceable Right to Payment for Performance Completed to Date
Scenario 2: Seller Has an Enforceable Right to Payment for Performance Completed to Date
PART III: PROPERTY RENTALS
General Rules
Lease Classification
Accounting Model
Lessor (Landlord)
Lessee (Tenant)
Other Considerations
Lease Commence Date
Lease Term and Purchase Options
Lease Payments
Initial Direct Costs
Sale-Leaseback Transactions
Comprehensive Illustrations: Activities or Costs That Are Not Components of a Contract
Scenario 1: Payments for Taxes and Insurance Are Variable
Scenario 2: Payments for Taxes and Insurance are Fixed
Scenario 3: Common Area Maintenance
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