ASC 235-972

Real Estate—Common Interest Realty Associations

235 Notes to Financial Statements

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Source downloaded: 2026-09-09T23:16:53.919Z.Record version dafc81293e4a. Effective date must be checked in the source.

In brief

IntermediateDisclosure Industry-specific Presentation

This Subtopic sets the note disclosure requirements unique to common interest realty associations (CIRAs) — condominiums, homeowners associations, cooperative housing corporations, and time-share associations. Beyond ordinary GAAP disclosures, a CIRA must describe its legal form and the entity it serves, developer services/subsidies and developer-owned units, the proposed use of special assessment funds, and any assessments used for undesignated purposes (235-972-50-1). It must also disclose its funding for future major repairs and replacements (235-972-50-2) and present cost estimates for those repairs and replacements as unaudited supplementary information (235-972-50-3).

Key points (7)

Notes must disclose the CIRA's legal form (corporation or association), the form of the entity served (condominium, homeowners association, cooperative), areas it controls, and the number of units — cooperatives may substitute number of shares and time-share associations number of weeks (235-972-50-1(a)).
Disclosure is required of services (such as maintenance) and subsidies provided by the developer and the number of units (shares/weeks) owned by the developer (235-972-50-1(b) through (c)).
The proposed use of funds collected in special assessments, and any assessments used for purposes other than those for which they were designated, must be disclosed (235-972-50-1(d) through (e)).
Funding disclosures for future major repairs and replacements must cover statutory, governing-document, mortgage or governmental accumulation requirements and compliance with them, the funding policy and compliance with it, a statement that funds are accumulated on estimated costs and that actual expenditures may vary materially, amounts assessed in the current period, and whether a study of remaining useful lives and future costs was conducted (235-972-50-2).
A CIRA that funds future major repairs and replacements by special assessments or borrowings when needs occur must disclose that information (235-972-50-2).
Estimates of current or future costs of major repairs and replacements of existing components (e.g., roofs) — including amounts required, methods, basis and assumptions about interest and inflation, sources, and study dates — are disclosed as unaudited supplementary information; no professional engineer's study is required, and estimates may be made by the board or licensed contractors (235-972-50-3(a)).
The supplementary presentation must list components to be repaired and replaced, their estimated remaining useful lives, estimated current or future replacement costs, and funds accumulated for each to the extent designated by the board (235-972-50-3(b)).

For students. This is a narrow industry disclosure package: the common trap is treating the replacement-reserve cost estimates as audited note disclosure when 235-972-50-3 makes them unaudited supplementary information, and assuming a professional engineering study is mandatory (it is not).

common interest realty association future major repairs and replacements special assessments developer subsidies funding policy disclosure unaudited supplementary information remaining useful lives of common property designated funds

Machine-generated study aid for ASC 235-972. Check the source paragraphs below.

235-972-00Status

Source downloaded: 2026-09-09T23:16:43.120Z.Record version 974973396109. Effective date must be checked in the source.

235-972-00-1

The following table identifies the changes made to this Subtopic.

Paragraph	Action	Accounting Standards Update	Date

972-235-50-1	Amended	Accounting Standards Update No. 2014-09	05/28/2014

235-972-05Overview and Background

Source downloaded: 2026-09-09T23:16:44.908Z.Record version 6da34ac89122. Effective date must be checked in the source.

235-972-05-1

This Subtopic addresses disclosure requirements for common interest realty associations. Subtopic-specific disclosure requirements are included within the respective Subtopics.

235-972-15Scope and Scope Exceptions

Source downloaded: 2026-09-09T23:16:46.780Z.Record version 29d41bb3bfe3. Effective date must be checked in the source.

Overall Guidance

235-972-15-1

This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 972-10-15.

235-972-50Disclosure

Source downloaded: 2026-09-09T23:16:53.919Z.Record version 51b5e3d61533. Effective date must be checked in the source.

235-972-50-1

In addition to disclosures required by generally accepted accounting principles (GAAP) for other entities, the notes to a common interest realty association's financial statements shall also include disclosures about all of the following:

a
The common interest realty association's legal form (corporation or association) and that of the entity for which it provides services (for example, condominium, homeowners association, cooperative), areas it controls, and the number of units. (In place of the number of units, cooperative housing corporations may disclose the number of shares and time-share associations may disclose the number of weeks.)
b
Services (such as maintenance) and subsidies provided by the developer
c
The number of units (shares for cooperative housing corporations and weeks for time-share associations) owned by the developer
d
The proposed use for funds collected in special assessments
e
Assessments that were used for purposes other than those for which they were designated.

Future Major Repairs and Replacements

235-972-50-2

A common interest realty association shall disclose information in its notes to financial statements about its funding for future major repairs and replacements. Disclosures about such funding shall include all of the following:

a
Requirements, if any, in statutes or the common interest realty association's documents (or mortgage or governmental bodies funding requirements, for example, Federal Housing Administration often has such requirements) to accumulate funds for future major repairs and replacements and the common interest realty association's compliance or lack of compliance with them
b
A description of the common interest realty association's funding policy, if any, and compliance with that policy
c
A statement that funds, if any, are being accumulated based on estimated future (or current) costs, that actual expenditures may vary from these estimates, and that the variations may be material
d
Amounts assessed for major repairs and replacements in the current period, if any
e
A statement indicating whether a study was conducted to estimate the remaining useful lives of common property components and the costs of future major repairs and replacements.

Common interest realty associations that fund future major repairs and replacements by special assessments or borrowings when needs occur shall disclose that information.

Required Supplementary Information

235-972-50-3

Common interest realty associations shall disclose the following as unaudited supplementary information:

a
Estimates of current or future costs of future major repairs and replacements of all existing components, such as roofs, including estimated amounts required, methods used to determine the costs, the basis for calculations (including assumptions, if any, about interest and inflation rates), sources used, and the dates of studies, made for this purpose, if any. There is no requirement for common interest realty associations to obtain studies prepared by professional engineers. The estimates may be made by the board of directors or estimates obtained from licensed contractors.
b
A presentation of components to be repaired and replaced, estimates of the remaining useful lives of those components, estimates of current or future replacement costs, and amounts of funds accumulated for each to the extent designated by the board.