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Ramifications of Accounting Standards Update for CRE

The clarification will probably result in more commercial real estate acquisition transactions being accounted for as asset acquisitions rather than business combinations, Haskell & White's Paul Louis tells GlobeSt.com.

By Carrie Rossenfeld | Updated on December 06, 2017

Paul Louis Louis: “Brokers, developers, tenants and landlords will need to be up to speed on the new accounting guidance, mainly for revenue from contracts with customers (codified in ASC 606) and leases (codified in ASC 842).”

IRVINE, CA—The Financial Accounting Standards Board has clarified its more than a decade-old definition of a “business.” The clarification is included in Accounting Standards Update (ASU) 2017-01, which was meant to assist companies in applying the broadly interpreted FASB Statement No. 141(R), Business Combinations (codified in ASC 805).

The clarification will probably result in more commercial real estate acquisition transactions being accounted for as asset acquisitions rather than business combinations, Haskell & White audit principal Paul Louis, CPA, tells GlobeSt.com. We spoke with Louis about the ramifications of this clarification for our industry.

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