# ASC 974-10-05: Real Estate—Real Estate Investment Trusts — Overall — 05 Overview and Background

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/974/10/#05-overview-and-background)

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## ASC 974-10-05: 05 Overview and Background

[Read section](https://asc.understandingaccounting.org/asc/974/10/#05-overview-and-background)

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##### [974-10-05-1](https://asc.understandingaccounting.org/asc/974/10/#974-10-05-1)

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The Codification contains several Topics for real estate due to the differing accounting treatment for various real estate subindustries. The Topics include:

1.  a
    
    Real Estate—General
    
2.  b
    
    Real Estate—Common Interest Realty Associations
    
3.  c
    
    Real Estate—Real Estate Investment Trusts
    
4.  d
    
    Real Estate—Time-Sharing Activities
    
5.  e
    
    Real Estate—Retail Land.
    

See also Subtopic 842-40 for accounting guidance for the sale of real estate that is part of a sale-leaseback transaction.

##### [974-10-05-2](https://asc.understandingaccounting.org/asc/974/10/#974-10-05-2)

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The Real Estate—Real Estate Investment Trusts Topic addresses the unique accounting and reporting issues for real estate investment trusts. This Topic includes the following Subtopics:

1.  a
    
    Overall
    
2.  b
    
    Investments—Equity Method and Joint Ventures
    
3.  c
    
    [Subparagraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/).
    
4.  cc
    
    Other Expenses
    
5.  d
    
    Consolidation
    
6.  e
    
    Interest
    
7.  f
    
    Leases.

#### Tax Considerations

##### [974-10-05-3](https://asc.understandingaccounting.org/asc/974/10/#974-10-05-3)

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The tax considerations included here represent an understanding of the Internal Revenue Code requirements and practices at the time that the accounting and reporting standards were initially issued. The Financial Accounting Standards Board (FASB) assumes no responsibility for the accuracy of the tax guidance included here.

##### [974-10-05-4](https://asc.understandingaccounting.org/asc/974/10/#974-10-05-4)

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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)."), if it so elects, will not be required to pay federal corporate income taxes (other than that on tax preference items) if, among other things, at least 90 percent of its taxable income, as defined, is distributed to its shareholders. This Subtopic, however, is not restricted to those real estate investment trusts that have elected such tax treatment.