ASC

ASC 310-976

Real Estate—Retail Land

310 Receivables

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In brief

IntermediateSubsequent measurementDerecognitionDisclosureIndustry-specific

This subtopic governs the measurement, derecognition, and disclosure of receivables arising from retail land sales. Its core rule is that an allowance for contract cancellations must be provided for receivables not expected to be collected because of cancellation, estimated from historical collection data drawn from a representative, current sample covering an adequate period (310-976-35-1). Cancelled contract receivable balances are charged in full against that allowance (310-976-40-1), and specified receivable disclosures are required (310-976-50-1).

Key points (7)
  • An allowance shall be provided for retail land sale receivables not expected to be collected because of cancellation in subsequent periods (310-976-35-1).
  • The estimate must be based on historical data from a representative sample of receivables reflecting the latest available collection data and covering an adequate period of time (310-976-35-1).
  • Sampled receivables with payments unpaid at the end of the sample period for the specified delinquency periods are treated as uncollectible, and the allowance for previously recognized sales is adjusted accordingly (310-976-35-1).
  • The specified delinquency periods may be extended if the seller's recent experience has been better, or if the buyer has accepted or will accept personal liability on the debt and the buyer's ability to complete payment can be determined (310-976-35-2).
  • When contracts are cancelled, the related receivable balances are charged in their entirety to the allowance for contract cancellations (310-976-40-1).
  • Required disclosures are maturities of accounts receivable for each of the five years following the balance sheet date, delinquent accounts receivable and the method(s) of determining delinquency, and the weighted average and range of stated interest rates (310-976-50-1).
  • Certain measurement paragraphs (310-976-30-1 and 35-3) were superseded by ASU 2014-09, which moved retail land sale revenue recognition into the ASC 606 framework.

For students. This is a narrow industry-specific pocket of guidance: the key idea is that cancellation risk on retail land contracts is handled through a dedicated allowance estimated from delinquency sampling, not through general credit-loss judgment. A common misunderstanding is thinking ASU 2014-09 wiped out the whole subtopic — it superseded the revenue-related measurement paragraphs, but the cancellation allowance, charge-off, and disclosure requirements remain.

retail land salesallowance for contract cancellationsdelinquency periodshistorical collection datareceivable maturities disclosurestated interest ratescharge-off to allowance

Machine-generated study aid for ASC 310-976. Check the source paragraphs below.

310-976-00Status

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310-976-00-1
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Full Accrual MethodSupersededAccounting Standards Update No. 2014-0905/28/2014
976-310-30-1SupersededAccounting Standards Update No. 2014-0905/28/2014
976-310-35-3SupersededAccounting Standards Update No. 2014-0905/28/2014

310-976-05Overview and Background

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310-976-05-1
This Subtopic provides measurement and disclosure guidance concerning receivables from retail land sales.

310-976-15Scope and Scope Exceptions

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Overall Guidance

310-976-15-1
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 976-10-15.

310-976-20Glossary

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310-976-30Initial Measurement

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310-976-35Subsequent Measurement

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310-976-35-1
An allowance shall be provided for receivables that are not expected to be collected because of cancellation in subsequent periods. Historical data shall be evaluated to predict the collection of receivables from current sales. The historical data shall be selected from a representative sample of receivables that reflect the latest available collection data and cover an adequate period of time. The receivables in the sample shall be considered uncollectible and the allowance for contract cancellations provided for previously recognized sales shall be appropriately adjusted if payments due are unpaid at the end of the sample period selected for the following delinquency periods.
  • Percent of Contract Price Paid Delinquency Period Less than 25 percent 90 days 25 percent but less than 50 percent 120 days 50 percent and over 150 days
310-976-35-2
The specified delinquency periods may be extended if the seller's recent experience has been better or if the buyer has accepted, or is willing to accept, personal liability on its debt, provided that the buyer's ability to complete payment on the contract can be determined.

310-976-40Derecognition

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310-976-40-1
Receivable balances applicable to cancelled contracts are charged in their entirety to the allowance for contract cancellations when those contracts are cancelled.

310-976-50Disclosure

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310-976-50-1
Disclosures by entities with retail land sales operations shall include all of the following:
  1. a
    Maturities of accounts receivable for each of the five years following the date of the financial statements
  2. b
    Delinquent accounts receivable and the method(s) for determining delinquency
  3. c
    The weighted average and range of stated interest rates of receivables.

Related subtopics