ASC

ASC 360-20

Real Estate Sales

360 Property, Plant, and Equipment

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In brief

IntermediateDerecognitionRevenueLeasesTransition and effective dates

ASC 360-20 formerly contained the specialized U.S. GAAP for recognizing profit on sales of real estate (the old FASB Statement No. 66 model with full accrual, installment, cost recovery, deposit, and percentage-of-completion methods, plus sale-leaseback and continuing-involvement rules). Every paragraph in the subtopic has been superseded — mostly by ASU 2014-09 (Revenue from Contracts with Customers) and ASU 2016-02 (Leases). Sales of real estate are now accounted for under ASC 606 if the counterparty is a customer, or under ASC 610-20 for sales of nonfinancial assets to noncustomers, with sale-leaseback transactions governed by ASC 842-40.

Key points (6)
  • The entire subtopic is a shell: 360-20-05, 15, 40, 55, and 60 paragraphs are marked 'Paragraph superseded by Accounting Standards Update No. 2016-02,' and several implementation guidance paragraphs (360-20-55-11, 55-18, 55-68 through 55-77) were superseded by ASU 2014-09.
  • The transition paragraphs in Section 65 are also gone: 360-20-65-1 was superseded on 03/23/2010 (end of the EITF Issue No. 07-6 buy-sell clause transition period) and 360-20-65-2 on 06/26/2015 (end of the ASU 2011-10 in-substance real estate transition period).
  • Because ASU 2014-09 eliminated the real-estate-specific profit recognition model, a sale of real estate to a customer is now evaluated under ASC 606, including the control-transfer criteria in 606-10-25-30 and the repurchase-agreement guidance in 606-10-55-66 through 55-78.
  • Sales or transfers of nonfinancial assets, including in-substance real estate, to counterparties that are not customers are accounted for under ASC 610-20, which applies the ASC 606 control and measurement concepts to derecognition.
  • Sale-leaseback transactions involving real estate, formerly subject to the continuing-involvement and deposit-method restrictions in this subtopic, are now governed by ASC 842-40 following ASU 2016-02.
  • Because no operative guidance remains, no recognition, measurement, presentation, or disclosure requirement may be sourced to 360-20; citing it as authoritative support is an error.

For students. Historically one of the most-tested areas of GAAP (full accrual vs. installment vs. deposit method), ASC 360-20 is now entirely superseded — the common mistake is applying the old adequate-initial-investment and continuing-involvement tests instead of the ASC 606/610-20 control model and ASC 842-40 for sale-leasebacks.

superseded guidancereal estate salesprofit recognitionin-substance real estatesale-leasebackcontinuing involvementderecognition of nonfinancial assetstransition period

Machine-generated study aid for ASC 360-20. Check the source paragraphs below.

360-20-00Status

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360-20-00-1
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Conduit Debt SecuritiesSupersededAccounting Standards Update No. 2016-0202/25/2016
Conduit Debt SecurityAddedMaintenance Update 2014-20 (PDF)09/29/2014
Cost Recovery MethodSupersededAccounting Standards Update No. 2016-0202/25/2016
Deposit MethodSupersededAccounting Standards Update No. 2016-0202/25/2016
Fair Value (2nd def.)SupersededAccounting Standards Update No. 2016-0202/25/2016
Fair Value (3rd def.)AddedAccounting Standards Update No. 2012-0410/01/2012
Installment MethodSupersededAccounting Standards Update No. 2016-0202/25/2016
Integral EquipmentSupersededAccounting Standards Update No. 2016-0202/25/2016
Market ParticipantsSupersededAccounting Standards Update No. 2016-0202/25/2016
Nonpublic Entity (1st def.)SupersededAccounting Standards Update No. 2016-0202/25/2016
Nonpublic Entity (1st def.)AmendedMaintenance Update 2014-20 (PDF)09/29/2014
Orderly TransactionSupersededAccounting Standards Update No. 2016-0202/25/2016
Reduced-Profit MethodSupersededAccounting Standards Update No. 2016-0202/25/2016
Related PartiesSupersededAccounting Standards Update No. 2016-0202/25/2016
Sale-Leaseback AccountingSupersededAccounting Standards Update No. 2016-0202/25/2016
Sale-Leaseback AccountingAddedAccounting Standards Update No. 2014-0905/28/2014
360-10-05-1SupersededAccounting Standards Update No. 2016-0202/25/2016
360-20-05-1AmendedAccounting Standards Update No. 2014-0905/28/2014
360-10-05-2SupersededAccounting Standards Update No. 2016-0202/25/2016
360-10-15-1 through 15-6
SupersededAccounting Standards Update No. 2016-0202/25/2016
360-20-15-1 through 15-3
AmendedAccounting Standards Update No. 2014-0905/28/2014
360-20-15-3AmendedAccounting Standards Update No. 2011-1012/14/2011
360-20-15-4AmendedAccounting Standards Update No. 2012-0410/01/2012
360-20-15-5AmendedAccounting Standards Update No. 2012-0410/01/2012
360-20-15-7AmendedAccounting Standards Update No. 2012-0410/01/2012
360-20-15-8AmendedAccounting Standards Update No. 2012-0410/01/2012
360-20-15-10AmendedAccounting Standards Update No. 2016-0101/05/2016
360-20-40-1 through 40-64
SupersededAccounting Standards Update No. 2016-0202/25/2016
360-20-55-1 through 55-10
SupersededAccounting Standards Update No. 2016-0202/25/2016
360-20-55-2AmendedMaintenance Update 2016-17 (PDF)09/02/2016
360-20-55-3AmendedAccounting Standards Update No. 2016-1912/14/2016
360-20-55-10AmendedMaintenance Update 2016-11 (PDF)06/27/2016
360-20-55-10AmendedAccounting Standards Update No. 2014-0905/28/2014
360-20-55-11SupersededAccounting Standards Update No. 2014-0905/28/2014
360-20-55-12 through 55-17
SupersededAccounting Standards Update No. 2016-0202/25/2016
360-20-55-18SupersededAccounting Standards Update No. 2014-0905/28/2014
360-20-55-19 through 55-67
SupersededAccounting Standards Update No. 2016-0202/25/2016
360-20-55-21AmendedAccounting Standards Update No. 2014-0905/28/2014
360-20-55-68 through 55-77
SupersededAccounting Standards Update No. 2014-0905/28/2014
360-20-55-68 through 55-77
AddedAccounting Standards Update No. 2011-1012/14/2011
360-20-60-1 through 60-3
SupersededAccounting Standards Update No. 2016-0202/25/2016
360-20-65-2AddedAccounting Standards Update No. 2011-1012/14/2011

360-20-05Overview and Background

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360-20-15Scope and Scope Exceptions

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360-20-40Derecognition

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360-20-55Implementation Guidance and Illustrations

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360-20-60Relationships

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360-20-65Transition and Open Effective Date Information

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360-20-65-1
Paragraph superseded on 03/23/2010 after the end of the transition period stated in EITF Issue No. 07-6, "Accounting for the Sale of Real Estate Subject to the Requirements of FASB Statement No. 66 When the Agreement Includes a Buy-Sell Clause."
360-20-65-2
Paragraph superseded on 06/26/2015 after the end of the transition period stated in Accounting Standards Update No. 2011-10, Property, Plant, and Equipment (Topic 360): Derecognition of in Substance Real Estate—a Scope Clarification.

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