2020 Real Estate Accounting Guide has been saved
2020 Real Estate Accounting Guide
Real Estate Accounting and Financial Reporting Update
The latest edition of our annual update highlights selected accounting and reporting developments that may be of interest to real estate entities. The most notable developments in 2020 include the FASB’s issuance of an ASU that allows companies to defer adoption of the Board’s new standards on revenue recognition (ASC 606) and leasing (ASC 842) in light of the coronavirus disease 2019 pandemic.
A look at key issues
The real estate sector continues to be influenced by rapid technological advancements, industry disrupters, and significant demographic shifts, including growing urbanization, the longevity of baby boomers, and the tenancy and workplace demands (such as flexible location and workspaces) of millennials and “generation Z.” In addition, as a result of the COVID-19 pandemic and the prevailing macroeconomic environment, the volatility of the global economy has continued to increase. There is also concern about the possibility of a US recession, which has affected decision making for companies in all industries, including real estate.
COVID-19 was also the most significant factor affecting the accounting and financial reporting requirements for real estate companies in 2020. As a result of the pandemic, many lessors provided rent concessions to their lessees and, therefore, the FASB issued a staff Q&A1 to provide guidance on the accounting for such concessions. Given the significance of the pandemic and its impact on all industries, Deloitte has published several articles to help companies deal with the resulting challenges (see Deloitte’s COVID-19 Resources page).
In addition to the impact of the pandemic, there were a few other changes in 2020 that affected the accounting and financial reporting requirements for real estate companies. This publication provides some insight into those changes, including those resulting from the FASB’s issuance of updates related to the adoption of the standards on revenue recognition, credit losses, and leases.
1 FASB Staff Q&A, Topic 842 and Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic.
The topics covered in this publication include:
- Financial Instruments
- SEC Guidance
- Revenue Recognition
- Income Taxes
- Cloud Computing Arrangements
If you have any questions about the Real Estate Accounting and Financial Reporting update, please contact any of the following Deloitte industry specialists.
The FASB Accounting Standards Codification® material is copyrighted by the Financial Accounting Foundation, 401 Merritt 7, PO Box 5116, Norwalk, CT 06856-5116, and is reproduced with permission.
This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.
Copyright © 2021 Deloitte Development LLC. All rights reserved.
Innovation and quality in audit
Explore how financial services firms are implementing digital transformation