ASC

ASC 605-978

Real Estate—Time-Sharing Activities

605 Revenue Recognition

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In brief

IntermediateRevenueRecognitionIndustry-specificTransition and effective dates

ASC 605-978 formerly contained the specialized revenue recognition guidance for real estate time-sharing transactions (interval sales, vacation clubs), including profit recognition tests, buyer's commitment and continuing investment thresholds, relative sales value accounting, and reload/upgrade transactions. Every paragraph in every section of the subtopic was superseded by Accounting Standards Update No. 2014-09. Time-sharing revenue is now accounted for under ASC 606, with transfers of real estate outside a customer contract addressed in ASC 610-20.

Key points (5)
  • All sections of 605-978 (05, 10, 15, 25, 30, and 55) were superseded by Accounting Standards Update No. 2014-09, so no operative guidance remains in this subtopic.
  • The former recognition guidance at 605-978-25-1 through 605-978-25-21 (buyer's commitment, continuing investment, percentage-of-completion, reload and upgrade transactions) is no longer authoritative.
  • The former measurement guidance at 605-978-30-1 through 605-978-30-10 (sales value, relative sales value method) is likewise superseded.
  • The extensive implementation guidance and illustrations at 605-978-55-1 through 605-978-55-95 were removed in their entirety.
  • Time-share interval and vacation-ownership sales are now evaluated under the contract-with-a-customer model in ASC 606 (see 606-10-25-1), with ASC 610-20 applying to transfers of nonfinancial assets to noncustomers.

For students. Cite this subtopic only to show that the legacy time-share revenue rules were eliminated by ASU 2014-09; the common mistake is still applying old tests such as adequacy of the buyer's down payment or percentage-of-completion profit recognition when ASC 606 (or ASC 610-20 for noncustomer transfers) now controls.

superseded guidancetime-sharing transactionsinterval salesrelative sales value methodbuyer's continuing investmentrevenue from contracts with customersreal estate sales

Machine-generated study aid for ASC 605-978. Check the source paragraphs below.

605-978-00Status

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605-978-00-1
The following table identifies the changes made to this Subtopic.
Paragraph Action Accounting Standards Update Date
Affinity Program Superseded Accounting Standards Update No. 2014-09 05/28/2014
Amenities Superseded Accounting Standards Update No. 2014-09 05/28/2014
Assumption Superseded Accounting Standards Update No. 2014-09 05/28/2014
Continuing Investments Superseded Accounting Standards Update No. 2014-09 05/28/2014
Continuing Involvement (2nd def.) Superseded Accounting Standards Update No. 2014-09 05/28/2014
Contract-for-Deed Superseded Accounting Standards Update No. 2014-09 05/28/2014
Exchange (2nd def.) Superseded Accounting Standards Update No. 2014-06 03/14/2014
Fixed Time Superseded Accounting Standards Update No. 2014-09 05/28/2014
Full Accrual Method Superseded Accounting Standards Update No. 2014-09 05/28/2014
Incentive Superseded Accounting Standards Update No. 2014-09 05/28/2014
Independent Third Party Superseded Accounting Standards Update No. 2014-09 05/28/2014
Inducement Superseded Accounting Standards Update No. 2014-09 05/28/2014
Interval Superseded Accounting Standards Update No. 2014-09 05/28/2014
Mini-Vacation Superseded Accounting Standards Update No. 2014-09 05/28/2014
Other than Retail Land Sales Superseded Accounting Standards Update No. 2014-09 05/28/2014
Owners Association Superseded Accounting Standards Update No. 2014-09 05/28/2014
Percentage-of-Completion Method Superseded Accounting Standards Update No. 2014-09 05/28/2014
Phase Superseded Accounting Standards Update No. 2014-09 05/28/2014
Phase (2nd def.) Amended Accounting Standards Update No. 2014-06 03/14/2014
Planned Amenities Superseded Accounting Standards Update No. 2014-09 05/28/2014
Points Superseded Accounting Standards Update No. 2014-09 05/28/2014
Project Superseded Accounting Standards Update No. 2014-09 05/28/2014
Promised Amenities Superseded Accounting Standards Update No. 2014-09 05/28/2014
Recourse Superseded Accounting Standards Update No. 2014-09 05/28/2014
Relative Sales Value Method Superseded Accounting Standards Update No. 2014-09 05/28/2014
Reload Superseded Accounting Standards Update No. 2014-09 05/28/2014
Reload Transaction Superseded Accounting Standards Update No. 2014-09 05/28/2014
Reload Transaction Added Accounting Standards Update No. 2014-06 03/14/2014
Rescission Superseded Accounting Standards Update No. 2014-09 05/28/2014
Right-to-Use Superseded Accounting Standards Update No. 2014-09 05/28/2014
Sales Value Superseded Accounting Standards Update No. 2014-09 05/28/2014
Sampler Program Superseded Accounting Standards Update No. 2014-09 05/28/2014
Tenancy-for-Years Superseded Accounting Standards Update No. 2014-09 05/28/2014
Time-Share Superseded Accounting Standards Update No. 2014-09 05/28/2014
Time-Sharing Superseded Accounting Standards Update No. 2014-09 05/28/2014
Time-Sharing Amended Accounting Standards Update No. 2014-06 03/14/2014
Time-Sharing Interest Superseded Accounting Standards Update No. 2014-09 05/28/2014
Time-Sharing Special-Purpose Entity Superseded Accounting Standards Update No. 2014-09 05/28/2014
Uncollectibility Superseded Accounting Standards Update No. 2014-09 05/28/2014
Undivided Interest (2nd def.) Superseded Accounting Standards Update No. 2014-06 03/14/2014
Unit Superseded Accounting Standards Update No. 2014-09 05/28/2014
Upgrade Superseded Accounting Standards Update No. 2014-09 05/28/2014
Upgrade Transaction Superseded Accounting Standards Update No. 2014-09 05/28/2014
Vacation Club Superseded Accounting Standards Update No. 2014-09 05/28/2014
978-605-05-1 Superseded Accounting Standards Update No. 2014-09 05/28/2014
978-605-10-1 Superseded Accounting Standards Update No. 2014-09 05/28/2014
978-605-15-1 Superseded Accounting Standards Update No. 2014-09 05/28/2014
978-605-25-1 through 25-21
 Superseded Accounting Standards Update No. 2014-09 05/28/2014
978-605-25-3 Amended Accounting Standards Update No. 2014-06 03/14/2014
978-605-25-12 Amended Accounting Standards Update No. 2014-06 03/14/2014
978-605-30-1 through 30-10
 Superseded Accounting Standards Update No. 2014-09 05/28/2014
978-605-30-6 Amended Accounting Standards Update No. 2014-06 03/14/2014
978-605-55-1 through 55-95
 Superseded Accounting Standards Update No. 2014-09 05/28/2014
978-605-55-16 Amended Accounting Standards Update No. 2014-06 03/14/2014

605-978-05Overview and Background

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605-978-10Objectives

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605-978-15Scope and Scope Exceptions

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605-978-20Glossary

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605-978-25Recognition

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605-978-30Initial Measurement

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605-978-55Implementation Guidance and Illustrations

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