Financial Statement Audit

Helping real estate companies with complicated reporting issues

Although there are many observers who believe the Great Recession ended in 2009, real estate companies continue to feel the effects of the historic downturn. And since real estate always lags behind in recoveries by 12 to 18 months that probably won’t change in the near term.

However, in some geographies and for some classes of assets (office, industrial, retail, multifamily) investors seem to have renewed interest as evidenced by sales volumes. There are signs of life, but most investors and lenders remain cautious and real estate companies have to do what they can to reassure them. That means providing accurate information in a timely manner.

Developers, owners, asset managers, lenders and state and federal agencies

The accounting experts and auditors at Plante Moran specialize in serving the needs of a full spectrum of players in the industry including developers, owners, property and asset managers, lenders, and state and federal agencies.

You will appreciate their understanding of the trends in your industry sector and their knowledge of legislation and the many new rules and regulations impacting accounting and tax. These changes complicate financial reporting.

Lease accounting standards to change

For instance they are watching closely the convergence projects and efforts to bring U.S. GAAP more in line with the international reporting standards, IFRS. The proposed changes to the lease accounting standards will have significant impact on the owners and users of real estate. Although FASB hasn’t finalized the transition guidance or effective dates of the proposed rule, it is expected that it will apply to existing leases. The proposed standard effectively eliminates off-balance sheet accounting for leases and would require virtually all assets currently leased under operating leases to be brought on to the balance sheet. 

Historical cost, fair market value, or other basis of accounting

Demands from investors and lenders further complicate the situation. They require financial information be presented when they need it and in a manner that best suits their needs. Our auditors can help you develop appropriate internal controls so that you are able to produce timely and accurate information. And you will appreciate their insights as they help you evaluate your choices and assist you in determining how to report your financial picture in a manner that meets the particular needs of your investors.

The market is still uncertain. Underwriters are choosy and Plante Moran auditors can provide the respected independent opinion that you need for success.