Investment Property Entities
Last updated on August 9, 2012. Please refer to the Current Technical Plan for information about the expected release dates of exposure documents and final standards.
(Updated sections are indicated with an asterisk *)
The staff has prepared this summary of Board decisions for information purposes only. Those Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.
Due Process Documents
*Decisions Reached at Last Meeting
*Summary of Decisions Reached to Date
*Board/Other Public Meeting Dates
The objective of this project is to consider whether entities should be provided an option or be required to measure investment property at fair value to align with the IASB the scope of entities that would apply the lessor accounting model developed under the joint leases project. The existing international accounting standard (IAS 40, Investment Property) provides an option.
As part of this project, the Board also plans to address Emerging Issues Task Force (EITF) Issue No. 09-D, “Application of Topic 946, Financial Services—Investment Companies, by Real Estate Investment Companies.”
Due Process DocumentsOn October 21, 2011, the Board issued a proposed Accounting Standards Update, Real Estate—Investment Property Entities (Topic 973). The comment period ended on February 15, 2012.
- Download the proposed Accounting Standards Update on Investment Property Entities
- Read the news release introducing the proposed Update
- Use the electronic feedback form to provide comments on the proposed Update
- Read the FASB In Focus which summarizes the proposed Update
- Read comment letters received on the proposed Update
- Read the summary of feedback received on the proposed Update
The Board discussed various approaches to providing investment property guidance in light of feedback received on the proposed Accounting Standards Update, Real Estate—Investment Property Entities (Topic 973).
The Board decided to evaluate the progress of other projects on its agenda, such as the joint project on leases and the research project on the application of asset- or entity-based guidance to nonfinancial assets held in an entity, before making a final decision on investment property guidance. The Board, however, did tentatively decide to eliminate three of the approaches presented by the staff for future consideration (Alternatives 1, 2, and 4 in the meeting handout were eliminated by the Board). As a result, the investment property entity concept that was proposed in the Exposure Draft would not be part of any future guidance and the real estate investment trust (REIT) scope exception in Topic 946, Financial Services—Investment Companies, would be retained for equity REITs. Issues relevant to mortgage REITs will be discussed at a future meeting as part of the investment companies project.
*Summary of Decisions Reached to Date (as of August 8, 2012)
See Decisions Reached at Last Meeting.
The Board will evaluate the progress of other projects on its agenda, such as the joint leases project and the research project on the application of asset- or entity-based guidance to nonfinancial assets held in an entity, before making a final decision on investment property guidance.
*Board/Other Public Meeting Dates
The Board meeting minutes are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final standard.
|*August 8, 2012||Board Meeting—Preliminary decision on the direction of the project.|
|May 30, 2012||Board Meeting—Summary of feedback received on the proposed Update.|
|March 16, 2012||Public Roundtable Meeting—Discussions about the proposed Update.|
|December 8, 2011||Board Meeting—Decision to extend the comment period.|
|August 24, 2011||Board Meeting—Decisions about the use of the NAV practical expedient, criteria to qualify as an investment property entity, initial measurement, rental revenue recognition, consolidation, interests with significant influence, early adoption, and the comment period.|
|June 13, 2011||Joint Board Meeting—Informational session for the IASB|
|May 11, 2011||Board Meeting—Decisions about the business activities criterion, presentation, and consolidation.|
|April 27, 2011||Board Meeting—Decisions about measurement of right-of-use assets and noninvestment property assets.|
|March 30, 2011||Board Meeting—Decisions about an exemption from certain criteria for wholly owned entities.|
|February 9, 2011||Board Meeting—Decisions to clarify the criteria to qualify as an investment property entity.|
|December 1, 2010||Board Meeting—Decisions about the criteria to qualify as an investment property entity.|
|November 10, 2010||Board Meeting—Summary of feedback received and decision to pursue an entity-based scope.|
|August 31, 2010||Board Meeting—Decisions about measurement, disclosures, and transition.|
|July 14, 2010||Board Meeting—Decision to require fair value measurement of investment properties.|
March 10, 2010
Board Meeting—Project added to agenda.
At the January 20, 2010, joint Board meeting, the FASB and the IASB tentatively decided that a lessor of investment properties would be required to apply the proposed new lessor accounting requirements if the lessor measures its investment properties at cost. The IASB tentatively decided that if a lessor of investment properties measures its investment properties at fair value in accordance with IAS 40, it would not apply the proposed new lessor accounting requirements to the lease; instead, it would continue to account for those leases as operating leases, as specified in IAS 17, Leases. Because U.S. generally accepted accounting principles (GAAP) do not provide an option to measure investment properties at fair value, the FASB added this project on March 10, 2010, to decide whether to permit or require investment properties to be carried at fair value.
Contact InformationUpaasna Laungani