# ASC 842-974-05: Leases — Real Estate—Real Estate Investment Trusts — 05 Overview and Background

Source: FASB Accounting Standards Codification, Basic View

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## ASC 842-974-05: 05 Overview and Background

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##### [842-974-05-1](https://asc.understandingaccounting.org/asc/842/974/#842-974-05-1)

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This Subtopic addresses recognition issues for a [real estate investment trust](https://asc.understandingaccounting.org/glossary/r/#real-estate-investment-trust "Real estate investment trusts generally are formed as trusts, associations, or corporations. They employ equity capital, coupled with substantial amounts of debt financing, in making real estate loans and investments. Real estate investment trusts must distribute substantially all of their taxable income to their shareholders annually in order to retain their favorable tax status (that is, dividends paid are treated as deductions in arriving at taxable income).") with an investment in a [service corporation](https://asc.understandingaccounting.org/glossary/s/#service-corporation "A real estate investment trust may establish a service corporation to perform services for the real estate investment trust or for third parties. Service corporations may provide property management and leasing services, as well as services to acquire, develop, construct, finance, or sell real estate projects.") providing leasing services.