NAREIT submitted comments to the Financial Accounting Standards Board (FASB) on Aug. 5 regarding the proposed accounting standards update on Other Income – Gains and Losses from the Derecognition of Nonfinancial assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.
NAREIT requested that the board consider scoping into the proposed standard sales of investments in real estate joint ventures where substantially all of the assets are investment properties.
“It seems to us that reporting the sale of a wholly owned investment property differently than a sale of an investment in a real estate joint venture results in complexities for investors and other financial statement users,” NAREIT said. “We have considered the board’s rationale for excluding equity method investments from the proposal, but believe that simplicity from the perspective of a financial statement user should be the primary factor in determining accounting standards when there may be multiple possibilities.”
(Contact: Chris Drula at cdrula@nareit.com)