# ASC 720-30-25: Other Expenses — Real and Personal Property Taxes — 25 Recognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/720/30/#25-recognition) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T01:08:19.562Z to 2026-09-10T01:08:19.562Z Record version: sha256:611ec5c4eca907e487781aad46176b970680226107da3eaa9059f33b43010dcc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-30-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/720/30/#25-recognition) SEC content: no #### Legal Liability for Property Taxes ##### [720-30-25-1](https://asc.understandingaccounting.org/asc/720/30/#720-30-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:08:19.562Z to 2026-09-10T01:08:19.562Z Record version: sha256:35e9cc4be65a8e4f888ddb5b5495cf587247eaf60c639c2785e80523e483e230 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Unlike excise, income, and social security taxes, which are directly related to particular business events, real and personal property taxes are based on the assessed valuation of property (tangible and intangible) as of a given date, as determined by the laws of a state or other taxing authority. The legal liability for such taxes is generally considered as accruing at the moment of occurrence of some specific event, rather than over a period of time. Depending on jurisdiction, various dates on which certain property taxes may accrue legally include the following: 1. a Assessment date 2. b Beginning of taxing authority's fiscal year 3. c End of taxing authority's fiscal year 4. d Date on which tax becomes a lien on the property 5. e Date tax is levied 6. f Date or dates tax is payable 7. g Date tax becomes delinquent 8. h Tax period appearing on tax bill. In a given case several of these dates may coincide. The date to be applied in a particular case necessarily requires reference to the law and court decisions of the state concerned. ##### [720-30-25-2](https://asc.understandingaccounting.org/asc/720/30/#720-30-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:08:19.562Z to 2026-09-10T01:08:19.562Z Record version: sha256:dc6e4b887ad55a7cb654b877f1d7563cd26c5553c33b07f60d3b9f220582ebfd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The legal liability for property taxes must be considered when title to property is transferred during the taxable year. Adjustments on account of property taxes paid or accrued are frequently incorporated in agreements covering the sale of real estate, which determine the question for the individual case as between the buyer and seller. #### Accounting for Property Taxes ##### [720-30-25-3](https://asc.understandingaccounting.org/asc/720/30/#720-30-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:08:19.562Z to 2026-09-10T01:08:19.562Z Record version: sha256:e0610286ca047feaf298191c06d4443c62b93e756b6cf03c013132b9dda12204 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Accounting questions arise as to the following: 1. a When the liability for real and personal property taxes should be recorded on the books of a taxpayer keeping his accounts on the accrual basis 2. b The amounts to be charged against the income of respective periods. ##### [720-30-25-4](https://asc.understandingaccounting.org/asc/720/30/#720-30-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:08:19.562Z to 2026-09-10T01:08:19.562Z Record version: sha256:d7145389638a09683ee03bd3126a0ee9afbba028d2ad011311e51fe8a83025ab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The decision is influenced by the particular circumstances of each tax. Such terms as assessment date and levy date vary in meaning in different jurisdictions. ##### [720-30-25-5](https://asc.understandingaccounting.org/asc/720/30/#720-30-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:08:19.562Z to 2026-09-10T01:08:19.562Z Record version: sha256:741594374ce6c2f4d723865e5473aaa7877afd0e00083f1f75dc447a0d4e2454 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Determination of the liability for the tax often proceeds by degrees, with several steps being taken at appreciable time intervals. For example, while it is known that the owner of real property is liable, with respect to each tax period, for a tax on property owned on the assessment date, the amount of the tax may not be fixed until much later. ##### [720-30-25-6](https://asc.understandingaccounting.org/asc/720/30/#720-30-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:08:19.562Z to 2026-09-10T01:08:19.562Z Record version: sha256:91e1b9a41fe60fe93853beb7a81200f212a82c9f1a2d7f3bbb29d50934a6e0e0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The inability to determine the exact amount of taxes is in itself no justification for failure to recognize an existing tax liability. All of the circumstances relating to a particular tax shall be considered before a satisfactory conclusion is reached. ##### [720-30-25-7](https://asc.understandingaccounting.org/asc/720/30/#720-30-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:08:19.562Z to 2026-09-10T01:08:19.562Z Record version: sha256:91f5cf3c3d83dec6f4247488d93c0e98f2d33f1bd7e2c6fe328dad3c66f233e6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Generally, the most acceptable basis of providing for property taxes is monthly accrual on the taxpayer's books during the fiscal period of the taxing authority for which the taxes are levied. The books will then show, at any closing date, the appropriate accrual or prepayment. The monthly accrual basis is practical and satisfactory so long as it is consistently followed.