Real Estate—Common Interest Realty Associations

This Subtopic applies the general related party disclosure requirements of Topic 850 to common interest realty associations (CIRAs), such as condominium and homeowners' associations. Its core point is that when board members, officers, or developers provide services to the association — for example insurance, maintenance, or management services — those transactions may require related party disclosure under Topic 850. Its scope follows that of Subtopic 972-10 (see 850-972-15-1).

For students. Short but testable: the point is that a developer or board member who also sells the association insurance or management services is a related party, so the arrangement must be disclosed. A common misunderstanding is thinking arm's-length pricing eliminates the disclosure — Topic 850 requires disclosure regardless, and cautions against asserting terms were equivalent to arm's-length unless substantiated.

Machine-generated study aid for ASC 850-972. Check the source paragraphs below.