To review the prescribed and/or preferred accounting principles for the recording and reporting of real estate development, operations and sales, including common construction accounting issues faced by real estate developers. The self-study webinar will also discuss current and proposed changes in real estate accounting, with an emphasis on making meaningful financial presentations for real estate entities, including partnerships and other investment vehicles.
DETAILED LEARNING OBJECTIVES
• Identify the principal categories of real estate
• Recognize relevant factors in selecting a legal entity for a real estate business
• Identify the entity structure generally subject to double taxation
• Distinguish flow through entities from C corporations for tax purposes
• Identify the authoritative source of nongovernmental US GAAP
• Recognize the general rules-based orientation of US GAAP compared with IFRS
• Identify Accounting Standards Codification topics relevant to real estate accounting
• Identify the minimum qualifying-asset percentage required under the REIT quarterly asset test
• Identify the minimum distribution requirement for REIT taxable income
• Recognize Level 1 inputs in the fair value hierarchy
• Identify the fair value hierarchy level associated with unobservable inputs
• Recognize the increased risk of misstatement associated with unobservable valuation inputs
• Identify acceptable valuation approaches under ASC 820
• Recognize the income capitalization approach to real estate valuation
• Apply the income capitalization formula to determine property value
• Identify when qualifying lessors may use an underlying asset’s cost as its fair value
• Identify the conditions for capitalizing real estate preacquisition costs
• Recognize when indirect acquisition costs qualify for capitalization in a real estate asset acquisition
• Identify assets that may qualify for interest capitalization
• Recognize the allocation of building expenses under a gross or full service lease
• Identify the control model used to determine whether a contract contains a lease under ASC 842
• Identify the components of a lessee’s initial right-of-use asset measurement
• Determine the accounting treatment for a lessor’s qualifying initial direct costs under an operating lease
• Identify when a real estate project is considered substantially completed and available for occupancy
• Recognize differences in industry revenue recognition practices before ASC 606
• Identify the comparability objective of ASC 606
• Determine the treatment of a real estate seller’s continuing performance obligations under ASC 606
• Identify the criteria for determining whether a promised good or service is distinct
• Identify the basis for allocating transaction price to separate performance obligations
• Recognize that right-of-use assets are subject to impairment testing
• Identify the criteria for classifying a long-lived asset as held for sale
• Identify lease related assets subject to the held-and-used impairment guidance
• Recognize indicators of long-lived asset impairment
• Identify the use of undiscounted cash flows in the ASC 360 recoverability test
• Distinguish appropriate real estate fair value valuation approaches from unsupported approaches
Calculate an impairment loss for a long-lived asset classified as held for sale
• Identify the measurement basis for long-lived assets held for sale
• Determine the accounting implications of a failed recoverability test for a held-and-used asset
• Calculate the impairment loss for a held-and-used asset after a failed recoverability test
• Identify the Accounting Standards Codification topic addressing debt modifications
• Identify factors that determine a debtor’s accounting for a restructured loan
• Distinguish debt modification accounting from extinguishment accounting when debt terms substantially change
• Identify the criteria for a debtor’s troubled debt restructuring under ASC 470-60
• Identify when significant influence supports application of the equity method
• Recognize the consolidation concerns addressed by the variable-interest-entity model
• Identify the next consolidation assessment when a reporting entity has no variable interest in another entity
• Identify the protection provided by a bid bond
• Identify the protection provided by a performance bond
• Calculate a surety premium using the contract amount and quoted premium rate
• Distinguish the lessee accounting models under IFRS 16 and ASC 842
• Identify the governance requirement for maintaining REIT status under federal tax law
• Recognize the lease term criterion for finance lease classification under ASC 842
• Identify the conditions required to capitalize interest during real estate construction
• Recognize declining occupancy as a potential indicator of real estate asset impairment
• Identify the transfer-of-control requirement for recognizing a gain in a qualifying sale and leaseback transaction
