ASC

ASC 605-976

Real Estate—Retail Land

605 Revenue Recognition

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In brief

IntermediateRevenueTransition and effective datesIndustry-specificRecognition

ASC 605-976 formerly contained the industry-specific revenue recognition guidance for retail land sales (sales of lots in subdivided developments, typically on installment contracts with refund/cancellation periods), including the percentage-of-completion and installment methods for such sales. Every paragraph in the subtopic — Sections 05, 15, 25, 30, 35, and 55 — was superseded by Accounting Standards Update No. 2014-09 (Revenue from Contracts with Customers). The subtopic therefore contains no remaining operative guidance; retail land sales are now accounted for under ASC 606 (and ASC 610-20 for sales of nonfinancial assets to noncustomers).

Key points (5)
  • All paragraphs of ASC 605-976, from 605-976-05-1 through 605-976-55-14, are marked 'Paragraph superseded by Accounting Standards Update No. 2014-09,' leaving no operative content in the subtopic.
  • Because the entire subtopic was superseded, the legacy retail land sales criteria (such as the specific down-payment, refund-period, and receivable-collectibility tests that governed use of the accrual or percentage-of-completion method versus the installment or deposit method) no longer apply.
  • Revenue from contracts with customers involving retail land sales is now recognized under ASC 606 using the five-step model, including estimating variable consideration for cancellations and applying the transfer-of-control criteria.
  • Sales of real estate that are not contracts with customers are accounted for under ASC 610-20 on gains and losses from the derecognition of nonfinancial assets.
  • The subtopic remains in the Codification only as a historical marker; entities reporting periods before the ASC 606 effective date (or comparative periods presented under legacy GAAP) may still need to consult the superseded text.

For students. The only thing to know here is that this entire subtopic is dead letter: ASU 2014-09 wiped out the specialized retail land sales rules, so never cite 605-976 as current GAAP. The common mistake is assuming real estate still has its own revenue recognition regime — it does not; apply ASC 606, or ASC 610-20 if the buyer is not a customer.

retail land salessuperseded guidancerevenue from contracts with customersinstallment methodpercentage-of-completion methodreal estate salestransition to asc 606

Machine-generated study aid for ASC 605-976. Check the source paragraphs below.

605-976-00Status

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605-976-00-1
The following table identifies the changes made to this Subtopic.
Paragraph Action Accounting Standards Update Date
Full Accrual Method Superseded Accounting Standards Update No. 2014-09 05/28/2014
976-605-05-1 Superseded Accounting Standards Update No. 2014-09 05/28/2014
976-605-15-1 Superseded Accounting Standards Update No. 2014-09 05/28/2014
976-605-25-1 through 25-12
 Superseded Accounting Standards Update No. 2014-09 05/28/2014
976-605-30-1 through 30-4
 Superseded Accounting Standards Update No. 2014-09 05/28/2014
976-605-35-1 Superseded Accounting Standards Update No. 2014-09 05/28/2014
976-605-55-1 through 55-14
 Superseded Accounting Standards Update No. 2014-09 05/28/2014

605-976-05Overview and Background

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605-976-15Scope and Scope Exceptions

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605-976-25Recognition

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605-976-30Initial Measurement

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605-976-35Subsequent Measurement

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605-976-55Implementation Guidance and Illustrations

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