# ASC 235-972: Notes to Financial Statements — Real Estate—Common Interest Realty Associations Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/235/972/) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-09T23:16:43.120Z to 2026-09-09T23:16:53.919Z Record version: sha256:dafc81293e4a4e326707e2695ccd7037e001e3f0cbce3cd72e59cfba233f5f3a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 235-972: Notes to Financial Statements — Real Estate—Common Interest Realty Associations ### Machine-generated study aids ```json { "summary": "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": [ "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))." ], "categories": [ "Disclosure", "Industry-specific", "Presentation" ], "audience_level": "intermediate", "student_note": "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).", "related_topics": [ "972-10", "972-235", "972-605", "235-10", "972-360" ], "key_concepts": [ "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" ] } ``` Source downloaded (UTC): 2026-09-09T23:16:43.120Z to 2026-09-09T23:16:43.120Z Record version: sha256:97497339610934b070ecf94b5c8d563c27041b12f4ed40215268ffbf534838ce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 235-972-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/235/972/#00-status) SEC content: no ##### [235-972-00-1](https://asc.understandingaccounting.org/asc/235/972/#235-972-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:16:43.120Z to 2026-09-09T23:16:43.120Z Record version: sha256:ef4c88512fb3aca251e7b02437abcc00c0fe937e51f23419496de4b824474f17 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
972-235-50-1AmendedAccounting Standards Update No. 2014-0905/28/2014
Source downloaded (UTC): 2026-09-09T23:16:44.908Z to 2026-09-09T23:16:44.908Z Record version: sha256:6da34ac89122837eb934b27da761d59d8ba795198462d8e1d82d488d1db279a7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 235-972-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/235/972/#05-overview-and-background) SEC content: no ##### [235-972-05-1](https://asc.understandingaccounting.org/asc/235/972/#235-972-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:16:44.908Z to 2026-09-09T23:16:44.908Z Record version: sha256:e432bd1dc9813f9de4c12319d4e9be6ec420ffd037352aa13422e59a8ebcf995 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic addresses disclosure requirements for [common interest realty associations](https://asc.understandingaccounting.org/glossary/c/#common-interest-realty-association "An association, also known as a community association, responsible for the governance of the common interest community, for which it was established to serve. A common interest realty association is generally funded by its members via periodic assessments by the common interest realty association so that it can perform its duties, which include management services and maintenance, repair, and replacement of the common property, among other duties established in the governing documents and by state statute."). Subtopic-specific disclosure requirements are included within the respective Subtopics. Source downloaded (UTC): 2026-09-09T23:16:46.780Z to 2026-09-09T23:16:46.780Z Record version: sha256:29d41bb3bfe33e7d78ceda2f669b7a46a71aa5756b7db542a56059c29b795d18 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 235-972-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/235/972/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [235-972-15-1](https://asc.understandingaccounting.org/asc/235/972/#235-972-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:16:46.780Z to 2026-09-09T23:16:46.780Z Record version: sha256:199f78c89af27d5c19aa12a41d9c54399c866319f2388953835d08c76a661649 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 972-10-15. Source downloaded (UTC): 2026-09-09T23:16:53.919Z to 2026-09-09T23:16:53.919Z Record version: sha256:51b5e3d61533117cff3f8497f3b03240ae6e1dbee1d3e0c39c07c71c7f591d8b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 235-972-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/235/972/#50-disclosure) SEC content: no ##### [235-972-50-1](https://asc.understandingaccounting.org/asc/235/972/#235-972-50-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:16:53.919Z to 2026-09-09T23:16:53.919Z Record version: sha256:d83deeeac93f96efb1242ed86fdac4f8490689e6b439821a0feb176846dc60ec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In addition to disclosures required by generally accepted accounting principles (GAAP) for other entities, the notes to a [common interest realty association's](https://asc.understandingaccounting.org/glossary/c/#common-interest-realty-association "An association, also known as a community association, responsible for the governance of the common interest community, for which it was established to serve. A common interest realty association is generally funded by its members via periodic assessments by the common interest realty association so that it can perform its duties, which include management services and maintenance, repair, and replacement of the common property, among other duties established in the governing documents and by state statute.") financial statements shall also include disclosures about all of the following: 1. a The common interest realty association's legal form (corporation or [association](https://asc.understandingaccounting.org/glossary/a/#association "An organization of unit owners responsible for the operation, administration, and management of the common property. Generally, a not-for-profit corporation with membership of all owners.")) and that of the entity for which it provides services (for example, [condominium](https://asc.understandingaccounting.org/glossary/c/#condominium "A form of ownership of real property that combines exclusive ownership of a defined space and an undivided interest in the common elements. (Also referred to as a condo.) A common interest realty association is not a condominium unless the undivided interests in the common elements are vested in the unit owners."), [homeowners association](https://asc.understandingaccounting.org/glossary/h/#homeowners-association "See Association."), cooperative), areas it controls, and the number of units. (In place of the number of units, [cooperative housing corporations](https://asc.understandingaccounting.org/glossary/c/#cooperative-housing-corporation "Also referred to as a coop, a cooperative housing corporation is an entity established as a corporation that owns the real estate, usually a multi-unit dwelling, and all improvements on it and is responsible for its maintenance and payment of debt service. Ownership in the corporation is evidenced by shares of stock owned by tenant-shareholders who are entitled to occupy a unit under a proprietary lease. The individual ownership interests in most cooperatives are structured as personal property interests, but some are structured as real property interests.") may disclose the number of shares and time-share associations may disclose the number of weeks.) 2. b Services (such as maintenance) and subsidies provided by the developer 3. c The number of units (shares for cooperative housing corporations and weeks for time-share associations) owned by the developer 4. d The proposed use for funds collected in special assessments 5. e Assessments that were used for purposes other than those for which they were designated. #### Future Major Repairs and Replacements ##### [235-972-50-2](https://asc.understandingaccounting.org/asc/235/972/#235-972-50-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:16:53.919Z to 2026-09-09T23:16:53.919Z Record version: sha256:8a2a6ba95ec281e620a2523756b2612c92c0e26bcab6b31afba71de13ed9754b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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: 1. 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 2. b A description of the common interest realty association's funding policy, if any, and compliance with that policy 3. 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 4. d Amounts assessed for major repairs and replacements in the current period, if any 5. e A statement indicating whether a study was conducted to estimate the remaining useful lives of [common property](https://asc.understandingaccounting.org/glossary/c/#common-property "A common interest realty association's real or personal property to which title or other evidence of ownership is held by either: Individual members in common The common interest realty association directly.") 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](https://asc.understandingaccounting.org/asc/235/972/#235-972-50-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:16:53.919Z to 2026-09-09T23:16:53.919Z Record version: sha256:e9296d0ce2ba275ba3dbdf8cdba6fbb7570f84dee22604502ea0c5c98550f0b6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Common interest realty associations shall disclose the following as unaudited supplementary information: 1. 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. 2. 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.