# ASC 323-974-05: Investments—Equity Method and Joint Ventures — Real Estate—Real Estate Investment Trusts — 05 Overview and Background

Source: FASB Accounting Standards Codification, Basic View

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## ASC 323-974-05: 05 Overview and Background

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##### [323-974-05-1](https://asc.understandingaccounting.org/asc/323/974/#323-974-05-1)

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This Subtopic addresses recognition and measurement issues for investments of [real estate investment trusts](https://asc.understandingaccounting.org/glossary/r/#real-estate-investment-trust "Real estate investment trusts generally are formed as trusts, associations, or corporations. They employ equity capital, coupled with substantial amounts of debt financing, in making real estate loans and investments. Real estate investment trusts must distribute substantially all of their taxable income to their shareholders annually in order to retain their favorable tax status (that is, dividends paid are treated as deductions in arriving at taxable income)."), including the accounting for related [service corporations](https://asc.understandingaccounting.org/glossary/s/#service-corporation "A real estate investment trust may establish a service corporation to perform services for the real estate investment trust or for third parties. Service corporations may provide property management and leasing services, as well as services to acquire, develop, construct, finance, or sell real estate projects.").