# ASC 810-970-25: Consolidation — Real Estate—General — 25 Recognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/810/970/#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): 2026-09-10T01:33:44.267Z to 2026-09-10T01:33:44.267Z Record version: sha256:f6080f466e692644dc6fd708f6a0dc0c5b940b5535e0ebd111e5c66e696dffac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 810-970-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/810/970/#25-recognition) SEC content: no #### General Partnerships ##### [810-970-25-1](https://asc.understandingaccounting.org/asc/810/970/#810-970-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:33:44.267Z to 2026-09-10T01:33:44.267Z Record version: sha256:4d3933d550c767865c46a146e36b8c67cd14114d7d485c529974d4ec0d4b61ff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A [general partnership](https://asc.understandingaccounting.org/glossary/g/#general-partnership "An association in which each partner has unlimited liability.") that is controlled, directly or indirectly, by an investor is, in substance, a subsidiary of the investor. Paragraph [810-10-15-8](https://asc.understandingaccounting.org/asc/810/10/#810-10-15-8) states that the usual condition for a controlling financial interest is ownership of a majority voting interest, and, therefore, as a general rule ownership by one entity, directly or indirectly, of over 50 percent of the outstanding voting shares of another entity is a condition pointing toward consolidation. However, if partnership voting interests are not clearly indicated, a condition that would usually indicate control is ownership of a majority (over 50 percent) of the financial interests in profits or losses (see paragraphs [970-323-35-16 through 35-17](https://asc.understandingaccounting.org/asc/323/970/#323-970-35-16) ). Paragraph [810-10-15-8](https://asc.understandingaccounting.org/asc/810/10/#810-10-15-8) states that the power to control may also exist with a lesser percentage of ownership, for example, by contract, lease, agreement with other stockholders, or by court decree. The power to control may also exist with a lesser percentage of ownership by agreement with other partners. ##### [810-970-25-2](https://asc.understandingaccounting.org/asc/810/970/#810-970-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:33:44.267Z to 2026-09-10T01:33:44.267Z Record version: sha256:32d3a18143374824514cb9ba4e88e8d1c3f09b0948a1ee41a7dd2a01a3be879f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. On the other hand, the majority interest holder may not control the entity if one or more of the other partners have substantive participating rights that permit those other partners to effectively participate in certain significant financial and operating decisions that are made in the [ordinary course of business](https://asc.understandingaccounting.org/glossary/o/#ordinary-course-of-business "Decisions about matters of a type consistent with those normally expected to be addressed in directing and carrying out current business activities, regardless of whether the events or transactions that would necessitate such decisions are expected to occur in the near term. However, it must be at least reasonably possible that those events or transactions that would necessitate such decisions will occur. The ordinary course of business does not include self-dealing transactions."). The determination of whether the rights of the other partners are substantive participating rights shall be evaluated in accordance with the guidance for substantive participating rights in paragraphs [810-10-25-2 through 25-14](https://asc.understandingaccounting.org/asc/810/10/#810-10-25-2) . If the other partners have substantive participating rights, the presumption of control by the majority interest holder is overcome. A controlling investor shall account for its investment under the principles of accounting applicable to investments in subsidiaries. Accordingly, interentity profits and losses on assets remaining within the group shall be eliminated. A noncontrolling investor in a general partnership shall account for its investment by the equity method and should be guided by the provisions of Topic 323. #### Limited Partnerships ##### [810-970-25-3](https://asc.understandingaccounting.org/asc/810/970/#810-970-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:33:44.267Z to 2026-09-10T01:33:44.267Z Record version: sha256:0efa6eeac27eda8262479d4c3bfe68e7144c9d95297cac7770600770157364eb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a [limited partnership](https://asc.understandingaccounting.org/glossary/l/#limited-partnership "An association in which one or more general partners have unlimited liability and one or more partners have limited liability. A limited partnership is usually managed by the general partner or partners, subject to limitations, if any, imposed by the partnership agreement.") does not meet the conditions in paragraph [810-10-15-14](https://asc.understandingaccounting.org/asc/810/10/#810-10-15-14) and, therefore, is not a variable interest entity, limited partners shall evaluate whether they have a controlling financial interest according to paragraph [810-10-15-8A](https://asc.understandingaccounting.org/asc/810/10/#810-10-15-8A). The guidance in Subtopic 810-10 on consolidation shall be used to determine whether any limited partners control the limited partnership: 1. a If no single partner controls the limited partnership, the general and limited partners shall apply the equity method of accounting to their interests, except for instances when a limited partner's interest is so minor that the limited partner may have virtually no influence over partnership operations and financial policies (see paragraph [323-30-S99-1](https://asc.understandingaccounting.org/asc/323/30/#323-30-S99-1)). 2. b [Subparagraph superseded by Accounting Standards Update No. 2015-02](https://asc.understandingaccounting.org/updates/asu-2015-02/). 3. c If a single limited partner controls the limited partnership, that limited partner shall consolidate the limited partnership and apply the principles of accounting applicable for investments in subsidiaries in Topic 810.