# ASC 330-978-35: Inventory — Real Estate—Time-Sharing Activities — 35 Subsequent Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/330/978/#35-subsequent-measurement) 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): 2026-09-09T23:53:49.878Z to 2026-09-09T23:53:49.878Z Record version: sha256:e999298da762f0115e529ec461e6c30f4bea00d7813302f505a505959656dac5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 330-978-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/330/978/#35-subsequent-measurement) SEC content: no #### Accounting for Cost of Sales and Time-Sharing Inventory ##### [330-978-35-1](https://asc.understandingaccounting.org/asc/330/978/#330-978-35-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:53:49.878Z to 2026-09-09T23:53:49.878Z Record version: sha256:93c00dd3a546348564b2b0155c0fbaac8f5401e3a7a913351354f568aac3e1e6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At least quarterly, both total [time-sharing](https://asc.understandingaccounting.org/glossary/t/#time-sharing "An arrangement in which a seller sells or conveys the right to occupy a dwelling unit for specified periods in the future. Forms of time-sharing arrangements include but are not limited to fixed and floating time, interval ownership, undivided interests, points programs, vacation clubs, right-to-use arrangements such as tenancy-for-years arrangements, and arrangements involving special-purpose entities. In this context, an undivided interest is a time-sharing arrangement that involves a tenant-in-common interest in a condominium unit or entire improved property, and in which the interest holder is assigned a specific period (generally, a specific week). The interest holder is also assigned a specific unit if the undivided interest is in the entire improved property.") revenue (actual to-date plus expected future revenue) and total cost estimates shall be recalculated. A time-sharing entity shall adjust at least quarterly even if it does not issue quarterly financial reports under Securities and Exchange Commission (SEC) reporting requirements. The estimate of total time-sharing revenue (actual to-date plus expected future revenue) for use in the [relative sales value method](https://asc.understandingaccounting.org/glossary/r/#relative-sales-value-method "The relative sales value method is similar to a gross profit method and is used to allocate inventory cost and determine cost of sales in conjunction with a sale. Under the relative sales value method, cost of sales is calculated as a percentage of net sales using a cost-of-sales percentage—the ratio of total estimated cost (including costs to complete, if any) to total estimated time-sharing revenue. Time-sharing revenue is calculated as total expected future revenue adjusted for total expected future bad-debt expense.") shall incorporate factors such as incurred or estimated uncollectibles, changes in sales prices or sales mix, repossession of intervals that the seller may or may not be able to resell, effects of [upgrade](https://asc.understandingaccounting.org/glossary/u/#upgrade "A time-sharing transaction whereby a customer relinquishes the right to a currently held time-sharing interval and obtains a higher-priced time-sharing interval from the same seller.") programs, and past or expected sales incentives to sell slow-moving inventory units. Such amounts should be included in the estimate of total time-sharing revenue for use in the relative sales value method even when those amounts are recognized as bad-debt expense within the statement of comprehensive income rather than included within the revenue recognized. The cost-of-sales percentage shall be similarly recalculated each time estimated revenue (including amounts reported or expected to be reported as revenue or as bad-debt expense) or cost is adjusted, using the new estimate of total time-sharing revenue and total cost (including costs to complete, if any). The effects of changes in estimate for cost shall be accounted for in each period using a current-period adjustment, that is, the [time-share](https://asc.understandingaccounting.org/glossary/t/#time-share "See Interval.") seller shall account for a change in estimate in the period of change so that the balance sheet at the end of the period of change and the accounting in subsequent periods are as they would have been if the revised estimates had been the original estimates. The effects of changes in estimate shall be disclosed in accordance with paragraph [250-10-50-4](https://asc.understandingaccounting.org/asc/250/10/#250-10-50-4). The inventory balance reported in the balance sheet, plus estimated costs to complete that inventory, if any, represents a pool of costs that will be charged against future revenue. ##### [330-978-35-2](https://asc.understandingaccounting.org/asc/330/978/#330-978-35-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:53:49.878Z to 2026-09-09T23:53:49.878Z Record version: sha256:5e72b0a175b95992a3c7a41b5b09f509ec6d53b98ef6200e6ce44b92aad28bbe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The recording of an adjustment for expected uncollectibles is accompanied by a corresponding adjustment to cost of sales and inventory that is effected through the application of the cost-of-sales percentage. However, under the relative sales value method, there is no accounting effect on inventory if a time-sharing [interval](https://asc.understandingaccounting.org/glossary/i/#interval "The specific period (generally, a specific week) during the year that a time-sharing unit is specified by agreement to be available for occupancy by a particular customer. Also denoted Time-Sharing Interest or Time-Share.") is repossessed or otherwise reacquired unless the repossession causes a change in expected uncollectibles. The seller shall, however, perform impairment testing on its inventory in accordance with paragraphs [360-10-35-38 through 35-40](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-38) , [360-10-35-43](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-43), and [360-10-40-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-40-5). ##### [330-978-35-3](https://asc.understandingaccounting.org/asc/330/978/#330-978-35-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:53:49.878Z to 2026-09-09T23:53:49.878Z Record version: sha256:46b67542b04959f09fce6a1c21f57631830d0c958688fbdf2a93fd79fd9f2941 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Revenue from and costs of rental and other operations during holding periods shall be accounted for as [incidental operations](https://asc.understandingaccounting.org/glossary/i/#incidental-operations "Revenue-producing activities engaged in during the holding or development period to reduce the cost of developing the property for its intended use, as distinguished from activities designed to generate a profit or a return from the use of the property."). [Incremental revenue from incidental operations](https://asc.understandingaccounting.org/glossary/i/#incremental-revenues-from-incidental-operations "Revenues that would not be produced except in relation to the conduct of incidental operations.") in excess of [incremental costs from incidental operations](https://asc.understandingaccounting.org/glossary/i/#incremental-costs-of-incidental-operations "Costs that would not be incurred except in relation to the conduct of incidental operations. Interest, taxes, insurance, security, and similar costs that would be incurred during the development of a real estate project regardless of whether incidental operations were conducted are not incremental costs.") shall be accounted for as a reduction of inventory costs—that is, the pool of inventory costs under the relative sales value method as described in paragraph [978-330-35-1](https://asc.understandingaccounting.org/asc/330/978/#330-978-35-1). Estimates of future amounts of such excess should not be factored into the calculations of the relative sales value method. Incremental costs in excess of incremental revenue should be charged to expense as incurred. #### Operations during Holding Periods ##### [330-978-35-4](https://asc.understandingaccounting.org/asc/330/978/#330-978-35-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:53:49.878Z to 2026-09-09T23:53:49.878Z Record version: sha256:70d2ae59762715d784f5916b92a9fed1ea9826a5b90890a89c9a49f60ee6e756 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Holding period](https://asc.understandingaccounting.org/glossary/h/#holding-period "The period during which a time-sharing interval is held for sale. Sellers may offer time-sharing units for rent during such holding periods.") operations include [sampler programs](https://asc.understandingaccounting.org/glossary/s/#sampler-program "A marketing program under which a time-share developer offers a customer, who has previously toured one of the developer's projects, a stay at one of the projects at a reduced rate. In exchange, the customer agrees to take another, subsequent tour of the project selected under the sampler program during the customer's stay at that project. If the subsequent tour results in a sale, the developer may allow the customer to apply some or all of the amount paid for the sampler toward the purchase of a time-share, as a part of the down payment. Also referred to as Exit Program.") and [mini-vacations](https://asc.understandingaccounting.org/glossary/m/#mini-vacation "A marketing program under which a time-share developer offers, for a fee, a short (typically, two to three days) visit to a destination where the developer operates a project. The developer typically subsidizes the fee to the customer for the mini-vacation in exchange for the customer attending a sales presentation at the project. The mini-vacation may include room accommodations, entertainment tickets, and similar items of value. The customer typically accepts the offer of the fee subsidy in exchange for his or her attending the sales presentation."). During holding periods, time-sharing intervals shall be accounted for as inventory and shall not be depreciated. Costs of operations during holding periods include seller subsidies and maintenance and related costs on time-sharing intervals held for sale. ##### [330-978-35-5](https://asc.understandingaccounting.org/asc/330/978/#330-978-35-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:53:49.878Z to 2026-09-09T23:53:49.878Z Record version: sha256:0ae0826a861ca4d89fce19b7075c42da56a0f1eb9e8894eb3dec0a4de528fab8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For time-sharing operations, the holding period (as that term is used in the definition of [incidental operations](https://asc.understandingaccounting.org/glossary/i/#incidental-operations "Revenue-producing activities engaged in during the holding or development period to reduce the cost of developing the property for its intended use, as distinguished from activities designed to generate a profit or a return from the use of the property.")) begins at the time that intervals are held for and are available for sale—for example, when units in domestic locations are legally registered for sale as time-shares. A seller shall evaluate each period as to whether units previously considered held for and available for sale shall continue to be characterized as such. ##### [330-978-35-6](https://asc.understandingaccounting.org/asc/330/978/#330-978-35-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:53:49.878Z to 2026-09-09T23:53:49.878Z Record version: sha256:15d29a8dff1e3b6ca4314c8d48e7dd47eb26e1f08de1c27765c44bee48277fe5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If rental activities occur other than during the holding period, the corresponding units shall be depreciated and those activities shall be accounted for as rental operations in accordance with Subtopic 842-30 on leases—lessors.