The new revenue recognition guidance is here, and the amount of work involved for those in the real estate industry to switch to the new framework will take careful attention and will vary by business.
While lease revenue is excluded from the scope of this new revenue guidance, nonlease components included in rental agreements, such as maintenance or other services, are covered. The new standard for recognizing revenue applies to all contracts with customers and, with so much variation in real estate contracts, each will need to be analyzed on its own or by portfolio of similar contracts.
Our revenue recognition resource guide for real estate identifies key areas of focus for the real estate industry, including:
- Common fee revenues that might have transaction price issues, including incentive management fees and deferred developer fees
- Timing of recognition of sales of real estate and developer or other service fees
- Impacts on balance sheet and taxes
Download our Revenue recognition resource guide for real estate to help your business implement the new standard.