ASC 250-978

Real Estate—Time-Sharing Activities

250 Accounting Changes and Error Corrections

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In brief

AdvancedIndustry-specific Subsequent measurement Presentation Inventory and PP&E

This Subtopic tells time-share sellers how to account for a change in the delineation of a time-share project or its phases. If the change results from a significant change in facts and circumstances about the project's development (e.g., major sales price or discount revisions, construction cost or inflation changes, temporary construction delays, design changes, or a shift toward more luxury units), it is a change in accounting estimate under Subtopic 250-10, recorded as a current-period adjustment per 978-330-35-1. If there is no such change in facts and circumstances, the change is a change in the method of applying an accounting principle under Subtopic 250-10.

Key points (6)

This Subtopic addresses changes in the delineation of time-share projects and phases (250-978-05-1).
Scope follows the Overall Subtopic scope in Section 978-10-15 (250-978-15-1).
A redelineation driven by a significant change in facts and circumstances related to project development is a change in accounting estimate under Subtopic 250-10, accounted for by current-period adjustment as discussed in 978-330-35-1 (250-978-35-1).
Examples of qualifying significant changes include significant revisions in sales prices or discount programs, construction contract price or inflation changes, temporary construction delays, design changes, and a decision to significantly increase the proportion of luxury versus standard units (250-978-35-1).
A redelineation without a significant change in facts and circumstances is a change in the method of applying an accounting principle under Subtopic 250-10 (250-978-35-1).
Merely dividing the same project development into more or fewer phases changes only how the project is accounted for, not the nature of the project, and therefore is the latter type of change (250-978-35-1).

For students. The exam trap is assuming every redelineation of a time-share project is an estimate change; the trigger is whether the underlying development facts and circumstances actually changed—if the seller merely re-slices the same development into more or fewer phases, it is a change in the method of applying an accounting principle instead.

time-share project delineation project phases change in accounting estimate change in method of applying an accounting principle current-period adjustment real estate time-sharing significant change in facts and circumstances

Machine-generated study aid for ASC 250-978. Check the source paragraphs below.

250-978-05Overview and Background

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250-978-05-1

This Subtopic addresses changes in the delineation of time-share projects and phases.

250-978-15Scope and Scope Exceptions

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Overall Guidance

250-978-15-1

This Subtopic follows the same Scope and Scope Exceptions as the Overall Subtopic, see Section 978-10-15.

250-978-35Subsequent Measurement

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Seller Identification of Projects and Phases

250-978-35-1

A change in the delineation of a project or its phases that results from a significant change in facts and circumstances related to the project's development—for example, significant revisions in sales prices or discount programs, construction contract price or inflation changes, temporary construction delays, design changes, or a decision by the seller to increase significantly the proportion of luxury versus standard units in a project—shall be accounted for as a change in accounting estimate in accordance with Subtopic 250-10 using a current-period adjustment as discussed in paragraph 978-330-35-1. A change in the delineation of a project or its phases without a significant change in facts and circumstances related to the project's development shall be accounted for as a change in the method of applying an accounting principle under Subtopic 250-10. An example of this latter change would be a decision to divide the same development of a project into more or fewer phases, which would be a change only in how the project is accounted for rather than a change in the nature (that is, the facts and circumstances) of the project itself.