# ASC 720-970: Other Expenses — Real Estate—General Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/720/970/) 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): 2026-09-10T01:13:30.229Z to 2026-09-10T01:13:42.190Z Record version: sha256:fa283f2b1bcc632b7a74b521380330f190ff591d02a15a89c72650f246fec78d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-970: Other Expenses — Real Estate—General ### Machine-generated study aids ```json { "summary": "ASC 720-970 addresses when real estate project costs must be expensed rather than capitalized. Its core rules: internal costs of preacquisition activities for a property that will be an operating property at acquisition date are expensed as incurred (720-970-25-1), and indirect costs not clearly related to projects under development or construction — including general and administrative expenses — are charged to expense as incurred (720-970-25-3). The Subtopic defines \"operating\" property as one where major construction is substantially complete and the property is either available for occupancy upon tenant improvements or already income-producing (720-970-25-2).", "key_points": [ "All content in this Subtopic resides in the Real Estate Project Costs Subsections, which govern capitalization versus expensing of real estate project costs (720-970-05-1 and 720-970-05-2).", "Internal costs of preacquisition activities incurred to acquire a property that will be classified as operating at the acquisition date must be expensed as incurred (720-970-25-1).", "A property is 'operating' at acquisition if major construction activity (not routine maintenance or cleanup) is substantially completed and it is either held available for occupancy upon completion of tenant improvements by the acquirer or already income-producing (720-970-25-2).", "Indirect costs that do not clearly relate to projects under development or construction, including general and administrative expenses, are charged to expense as incurred (720-970-25-3).", "Guidance on accounting for internal costs relating to real estate property acquisitions (i.e., the capitalization side) is located in the Real Estate Project Costs Subsection of Section 970-340-25 (720-970-05-3).", "Scope follows the Overall Subtopic scope in Section 970-10-15, including the Real Estate Project Costs Subsection of that section (720-970-15-1 and 720-970-15-2)." ], "categories": [ "Recognition", "Inventory and PP&E", "Industry-specific", "Initial measurement" ], "audience_level": "intermediate", "student_note": "This is the \"expense it\" mirror of ASC 970-340's capitalization rules: the key fork is whether the target property is already operating (expense internal preacquisition costs) versus under development or construction (potential capitalization). Students commonly assume all preacquisition costs can be capitalized — internal costs tied to an operating property, and any indirect/G&A costs not clearly tied to a development project, never can.", "related_topics": [ "970-340", "970-10", "970-360", "805", "835-20" ], "key_concepts": [ "real estate project costs", "preacquisition costs", "internal costs", "operating property", "indirect costs", "general and administrative expenses", "capitalization versus expensing", "project under development or construction" ] } ``` Source downloaded (UTC): 2026-09-10T01:13:30.229Z to 2026-09-10T01:13:30.229Z Record version: sha256:a613452f40dbbdec39d1b1e471a09413e569912b1ee8d0955a5eecbe6641ff8f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-970-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/720/970/#00-status) SEC content: no ##### [720-970-00-1](https://asc.understandingaccounting.org/asc/720/970/#720-970-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:30.229Z to 2026-09-10T01:13:30.229Z Record version: sha256:44e223be7eaf9cfc23adfa9fcb47d8184792c310551566159d3ec9c0515777a5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
970-720-05-3AmendedAccounting Standards Update No. 2012-0410/01/2012
Source downloaded (UTC): 2026-09-10T01:13:33.685Z to 2026-09-10T01:13:33.685Z Record version: sha256:3fa51641b38808854f1e3edaa8c4372bb7968e31fb0501bae897feec043479e9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-970-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/720/970/#05-overview-and-background) SEC content: no ##### [720-970-05-1](https://asc.understandingaccounting.org/asc/720/970/#720-970-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:33.685Z to 2026-09-10T01:13:33.685Z Record version: sha256:17aee5c8ec10a07d779b7ea53a6407339736aeeb77dd54bcefef2777de67da5c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The content in this Subtopic is contained in the Real Estate Project Costs Subsections. ### Real Estate Project Costs ##### [720-970-05-2](https://asc.understandingaccounting.org/asc/720/970/#720-970-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:33.685Z to 2026-09-10T01:13:33.685Z Record version: sha256:590c6f27427e45f8abe22a8bafdbb3a24a9e2c7a1d19e16e800a4b7fc3285cf8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Real Estate Project Costs Subsections of this Subtopic provide guidance on the capitalization and expensing of real estate [project costs](https://asc.understandingaccounting.org/glossary/p/#project-costs "Costs clearly associated with the acquisition, development, and construction of a real estate project."). ##### [720-970-05-3](https://asc.understandingaccounting.org/asc/720/970/#720-970-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:33.685Z to 2026-09-10T01:13:33.685Z Record version: sha256:886676cf46b10ae2cac9b7d25bb5aab7098467c59ee44454aab064c0cfa65987 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See the [Real Estate Project Costs Subsection](https://asc.understandingaccounting.org/updates/page-2147482051/) of Section 970-340-25 for guidance on the accounting for internal costs relating to real estate property acquisitions. Source downloaded (UTC): 2026-09-10T01:13:35.751Z to 2026-09-10T01:13:35.751Z Record version: sha256:73dfa27a56128c6a43014439192366b8a85d4ee0edf30bc87d10b7dae5b41529 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-970-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/720/970/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [720-970-15-1](https://asc.understandingaccounting.org/asc/720/970/#720-970-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:35.751Z to 2026-09-10T01:13:35.751Z Record version: sha256:2256b9f101a83c413a23d3727de711a5ff4c2f735f4f4a011a053640f1f436db Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 970-10-15. ### Real Estate Project Costs ##### [720-970-15-2](https://asc.understandingaccounting.org/asc/720/970/#720-970-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:35.751Z to 2026-09-10T01:13:35.751Z Record version: sha256:becbfbb1261e67f7caf04aea106209f6a19cbbfd703515f71c8f8102cc2a5c1b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Real Estate [Project Costs](https://asc.understandingaccounting.org/glossary/p/#project-costs "Costs clearly associated with the acquisition, development, and construction of a real estate project.") Subsections follow the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see the [Real Estate Project Costs Subsection](https://asc.understandingaccounting.org/asc/970/10/#15-scope-and-scope-exceptions) of Section 970-10-15. Source downloaded (UTC): 2026-09-10T01:13:42.190Z to 2026-09-10T01:13:42.190Z Record version: sha256:ed734747b85c721ca50fbb986aa7755a7aca44cebd4fd2c3d675d2a355230c93 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-970-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/720/970/#25-recognition) SEC content: no ### Real Estate Project Costs #### Preacquisition Costs ##### [720-970-25-1](https://asc.understandingaccounting.org/asc/720/970/#720-970-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:42.190Z to 2026-09-10T01:13:42.190Z Record version: sha256:1ad8ecf48769f6c434e1e4e9acf977d103d1395d0add07519adc94eba8768014 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Internal costs of preacquisition activities incurred in connection with the acquisition of a property that will be classified as operating at the date of acquisition shall be expensed as incurred. ##### [720-970-25-2](https://asc.understandingaccounting.org/asc/720/970/#720-970-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:42.190Z to 2026-09-10T01:13:42.190Z Record version: sha256:8de893034af6797842c4409c0d2d30347ca05d3dfef6e20a56927cf397cff3dc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A property would be considered operating if, at the date of acquisition, major construction activity (as distinguished from activities such as routine maintenance and cleanup) is substantially completed on the property and either of the following conditions exists: 1. a It is held available for occupancy upon completion of tenant improvements by the acquirer. 2. b It is already income-producing. #### Indirect Costs ##### [720-970-25-3](https://asc.understandingaccounting.org/asc/720/970/#720-970-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:42.190Z to 2026-09-10T01:13:42.190Z Record version: sha256:6d2ab342716028bf0afa3040db0910c4b71f34e432c5a9b2f5569a4c8c22033a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Indirect costs that do not clearly relate to projects under development or construction, including general and administrative expenses, shall be charged to expense as incurred.