# ASC 360-970-25: Property, Plant, and Equipment — Real Estate—General — 25 Recognition

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/360/970/#25-recognition)

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## ASC 360-970-25: 25 Recognition

[Read section](https://asc.understandingaccounting.org/asc/360/970/#25-recognition)

SEC content: no

### Real Estate Syndication

##### [360-970-25-1](https://asc.understandingaccounting.org/asc/360/970/#360-970-25-1)

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If a real estate developer sells a recently constructed office building to a public real estate syndication and negotiates a master leaseback agreement with the syndication general partner, under which the syndication pays a fee to the seller and the seller leases the vacant space at a market rate at the date of sale for a defined lease-up period, payments to and receipts from the seller shall be treated by the syndication as adjustments to the basis of the property and will affect future depreciation. See paragraph [970-360-55-3](https://asc.understandingaccounting.org/asc/360/970/#360-970-55-3) for guidance if the terms of the agreement meet the definition of a derivative.

### Real Estate Project Costs

#### Capitalized Project Costs

##### [360-970-25-2](https://asc.understandingaccounting.org/asc/360/970/#360-970-25-2)

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[Project costs](https://asc.understandingaccounting.org/glossary/p/#project-costs "Costs clearly associated with the acquisition, development, and construction of a real estate project."), which are costs that are clearly associated with the acquisition, development, and construction of a real estate project, shall be capitalized as a cost of that project. See Topic 340-40 for guidance on capitalization of costs that are not within the scope of this Subtopic or Subtopic 970-340.

##### [360-970-25-3](https://asc.understandingaccounting.org/asc/360/970/#360-970-25-3)

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[Indirect project costs](https://asc.understandingaccounting.org/glossary/i/#indirect-project-costs "Costs incurred after the acquisition of the property, such as construction administration (for example, the costs associated with a field office at a project site and the administrative personnel that staff the office), legal fees, and various office costs, that clearly relate to projects under development or construction. Examples of office costs that may be considered indirect project costs are cost accounting, design, and other departments providing services that are clearly related to real estate projects.") that relate to several projects shall be capitalized and allocated to the projects to which the costs relate.

#### Assets Transferred Between Entities

##### [360-970-25-4](https://asc.understandingaccounting.org/asc/360/970/#360-970-25-4)

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See Section 974-720-25 for adjustment of assets that will be transferred between a real estate investment trust and its adviser.

#### Other Considerations

##### [360-970-25-5](https://asc.understandingaccounting.org/asc/360/970/#360-970-25-5)

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See Section 410-20-25 regarding accounting for retirement and environmental costs at acquisition.