ASC

ASC 605-974

Real Estate—Real Estate Investment Trusts

605 Revenue Recognition

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In brief

IntroductoryRevenueIndustry-specificTransition and effective datesDerecognition

ASC 605-974 formerly provided industry-specific revenue recognition guidance for real estate investment trusts under the legacy ASC 605 revenue model. Every paragraph in the subtopic (Sections 05, 15, 25, 45, and 50) was superseded by ASU 2014-09, the revenue standard. REIT revenue transactions are now accounted for under ASC 606 (contracts with customers) or, for rental income, under the leases guidance in ASC 842.

Key points (5)
  • All paragraphs of this subtopic — 605-974-05-1, 15-1, 25-1, 25-2, 45-1, and 50-1 — were superseded by Accounting Standards Update No. 2014-09.
  • No extant recognition, presentation, or disclosure requirements remain in ASC 605-974; the subtopic is a shell retained for historical and cross-reference purposes.
  • Revenue from contracts with customers by REITs is now recognized under the five-step model in ASC 606, principally 606-10-25-1 and following.
  • Rental revenue earned by a REIT as lessor falls outside ASC 606 and is governed by ASC 842 (or ASC 840 for entities that have not yet adopted ASC 842).
  • Sales of real estate by a REIT are evaluated under ASC 610-20 (other income — gains and losses from the derecognition of nonfinancial assets) when the counterparty is not a customer.

For students. Do not cite ASC 605-974 as live authority \u2014 it is entirely superseded by ASU 2014-09. The common mistake is assuming REITs still have bespoke revenue rules; instead, analyze whether the inflow is a lease (ASC 842), a contract with a customer (ASC 606), or a nonfinancial asset sale (ASC 610-20).

superseded guidancereal estate investment trustindustry-specific revenue guidancerevenue from contracts with customersrental revenuederecognition of nonfinancial assets

Machine-generated study aid for ASC 605-974. Check the source paragraphs below.

605-974-00Status

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605-974-00-1
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Real Estate Investment TrustSupersededAccounting Standards Update No. 2014-0905/28/2014
974-605-05-1SupersededAccounting Standards Update No. 2014-0905/28/2014
974-605-15-1SupersededAccounting Standards Update No. 2014-0905/28/2014
974-605-25-1SupersededAccounting Standards Update No. 2014-0905/28/2014
974-605-25-1AmendedAccounting Standards Update No. 2012-0410/01/2012
974-605-25-2SupersededAccounting Standards Update No. 2014-0905/28/2014
974-605-25-2AmendedAccounting Standards Update No. 2012-0410/01/2012
974-605-45-1SupersededAccounting Standards Update No. 2014-0905/28/2014
974-605-50-1SupersededAccounting Standards Update No. 2014-0905/28/2014

605-974-05Overview and Background

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605-974-15Scope and Scope Exceptions

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605-974-20Glossary

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605-974-25Recognition

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605-974-45Other Presentation Matters

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605-974-50Disclosure

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Related subtopics