# ASC 720-978-05: Other Expenses — Real Estate—Time-Sharing Activities — 05 Overview and Background Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/720/978/#05-overview-and-background) 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): 2026-09-10T01:14:18.950Z to 2026-09-10T01:14:18.950Z Record version: sha256:1b0df735dfba280b228eaa92e862ebd528cb438857c600d8e8383f2e4b87008b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-978-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/720/978/#05-overview-and-background) SEC content: no ##### [720-978-05-1](https://asc.understandingaccounting.org/asc/720/978/#720-978-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:18.950Z to 2026-09-10T01:14:18.950Z Record version: sha256:64181cb192d4b18a544840928a35d176e99b0df835a5969b55b9527e6033aa3f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic addresses real estate [time-sharing](https://asc.understandingaccounting.org/glossary/t/#time-sharing "An arrangement in which a seller sells or conveys the right to occupy a dwelling unit for specified periods in the future. Forms of time-sharing arrangements include but are not limited to fixed and floating time, interval ownership, undivided interests, points programs, vacation clubs, right-to-use arrangements such as tenancy-for-years arrangements, and arrangements involving special-purpose entities. In this context, an undivided interest is a time-sharing arrangement that involves a tenant-in-common interest in a condominium unit or entire improved property, and in which the interest holder is assigned a specific period (generally, a specific week). The interest holder is also assigned a specific unit if the undivided interest is in the entire improved property.") recognition issues for other expenses. Other expenses may include selling costs, [seller subsidies](https://asc.understandingaccounting.org/glossary/s/#seller-subsidy "As related to time-sharing transactions, an amount that a seller pays to an owners association to cover net losses that may be incurred by the association."), and [owners association](https://asc.understandingaccounting.org/glossary/o/#owners-association "A body of owners formed to administer the rules and regulations of a time-sharing project. Also denoted homeowners association, interval owners association, property owners association, or vacation owners association.") costs. ##### [720-978-05-2](https://asc.understandingaccounting.org/asc/720/978/#720-978-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:18.950Z to 2026-09-10T01:14:18.950Z Record version: sha256:d0d3ec12fea4af6977532b69b1cd2349130631cf0fd1c72cdb36fd0a7d98a2f3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Time-share](https://asc.understandingaccounting.org/glossary/t/#time-share "See Interval.") projects typically incur significant operating costs, such as costs of property taxes, repairs and maintenance, and reservation systems. Time-share owners are responsible for paying for the costs of owning their intervals. Because there are many time-share owners for a given [project](https://asc.understandingaccounting.org/glossary/p/#project "A time-sharing development; some projects may be completed in a single phase, such as a single, one-story building containing several time-sharing units. Other projects may be completed in several phases, for example: A hotel that is being converted to time-sharing units one floor at a time while the unconverted units continue to be rented A number of buildings, each containing several time-sharing units, being built on a piece of property over an extended period of time."), a centralized mechanism generally is used to collect each owner's share of those costs of ownership and to pay for operating costs. ##### [720-978-05-3](https://asc.understandingaccounting.org/asc/720/978/#720-978-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:18.950Z to 2026-09-10T01:14:18.950Z Record version: sha256:9d6579a585d5c951f79357149360b6723b7a6bb775829d13565e9233c8ee5fec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A time-share seller typically forms an owners association to manage the day-to-day operations of a project. Time-share owners pay assessments to the owners association. The activities of an owners association are governed by its bylaws and by a board of directors. Typically, an owners association will hire a manager to handle the day-to-day operations. Often, an affiliate of the original time-share seller is hired by an owners association to manage a project. Because the time-share seller owns a majority of units at the beginning of the sellout of a project, it typically will appoint members of the owners association's board of directors. ##### [720-978-05-4](https://asc.understandingaccounting.org/asc/720/978/#720-978-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:18.950Z to 2026-09-10T01:14:18.950Z Record version: sha256:c5d3a56ac3ad87d48e3cccfc6d145184881c382c943e9371b7d28b79a1d2588a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Selling and marketing costs are significant in relation to sales revenue, and sales incentives and inducements are common.