# ASC 340-970-35: Other Assets and Deferred Costs — Real Estate—General — 35 Subsequent Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/340/970/#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): 2026-09-09T23:59:11.849Z to 2026-09-09T23:59:11.849Z Record version: sha256:745361c42572c089d031e3e4af709b23015ca957bd791b721a86b40c026ef53e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 340-970-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/340/970/#35-subsequent-measurement) SEC content: no ### Real Estate Project Costs #### Determining Amounts to Be Capitalized or Expensed ##### [340-970-35-1](https://asc.understandingaccounting.org/asc/340/970/#340-970-35-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:59:11.849Z to 2026-09-09T23:59:11.849Z Record version: sha256:c30ac62b5b9613502366648cf82931e2d9f014702351f5b7e5b6bd797bfa1a5f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Estimates and cost allocations shall be reviewed at the end of each financial reporting period until a project is substantially completed and available for sale. Costs shall be revised and reallocated as necessary for material changes on the basis of current estimates. Changes in estimates shall be reported in accordance with paragraphs [250-10-45-17 through 45-20](https://asc.understandingaccounting.org/asc/250/10/#250-10-45-17) and [250-10-50-4](https://asc.understandingaccounting.org/asc/250/10/#250-10-50-4). ##### [340-970-35-2](https://asc.understandingaccounting.org/asc/340/970/#340-970-35-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:59:11.849Z to 2026-09-09T23:59:11.849Z Record version: sha256:c4b68f3e985052ad08f634f2d2917ae1d6e68174d8e1d3d0bba1cded783d21cc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Capitalized rental costs directly related to revenue from a specific [operating lease](https://asc.understandingaccounting.org/glossary/o/#operating-lease "From the perspective of a lessee, any lease other than a finance lease. From the perspective of a lessor, any lease other than a sales-type lease or a direct financing lease.") or [direct financing lease](https://asc.understandingaccounting.org/glossary/d/#direct-financing-lease "From the perspective of a lessor, a lease that meets none of the criteria in paragraph 842-10-25-2 but meets the criteria in paragraph 842-10-25-3(b)and is not an operating lease in accordance with paragraph 842-10-25-3A."), other than [initial direct costs](https://asc.understandingaccounting.org/glossary/i/#initial-direct-costs "Incremental costs of a lease that would not have been incurred if the lease had not been obtained."), shall be amortized over the [lease term](https://asc.understandingaccounting.org/glossary/l/#lease-term "The noncancellable period for which a lessee has the right to use an underlying asset, together with all of the following: Periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option Periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option Periods covered by an option to extend (or not to terminate) the lease in which exercise of the option is controlled by the lessor."). Capitalized rental costs, other than initial direct costs, not directly related to revenue from a specific [lease](https://asc.understandingaccounting.org/glossary/l/#lease "A contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration.") shall be amortized over the period of expected benefit. The amortization period shall begin when the project is substantially completed and held available for occupancy. See paragraphs [970-340-25-18 through 25-19](https://asc.understandingaccounting.org/asc/340/970/#340-970-25-18) for the definition of substantially completed and held available for occupancy. Initial direct costs are defined in Topic 842 on leases, and the accounting for initial direct costs is prescribed in that Topic. Topic 842 does not address whether a lessee that accounts for the sale or rental of real estate projects under Topic 970 should capitalize rental costs associated with ground and building leases. ##### [340-970-35-3](https://asc.understandingaccounting.org/asc/340/970/#340-970-35-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:59:11.849Z to 2026-09-09T23:59:11.849Z Record version: sha256:8f1550cd058f9b8f484eafc4c379ead1d1fffd5583bae865118f80737c545dbe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an entity subsequently determines that a property will be classified as operating at the date of acquisition, the internal costs of preacquisition activities shall be charged to expense and any additional costs shall be expensed as incurred. ##### [340-970-35-4](https://asc.understandingaccounting.org/asc/340/970/#340-970-35-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:59:11.849Z to 2026-09-09T23:59:11.849Z Record version: sha256:31bd25d3fc9d26654e2be42d6507f806e1f5a53e1a5be839fed52874c61e3da2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an entity subsequently determines that a property will be classified as nonoperating at the date of acquisition, previously expensed internal costs of preacquisition activities shall not be capitalized as part of the cost of that acquisition.