Real Estate Knowledge Center
Explore our verified library of Real Estate transactions. Every entry is reviewed for IFRS compliance and real-world accuracy by our technical accounting team.
Lease Incentive (Rent-Free Period)
Accounting for a 12-month lease where the first 2 months are free.
Funds Held in Escrow (Property Sale)
Recording cash held by a third party during a property transaction.
Revaluation of Investment Property (Fair Value)
Adjusting the value of a building held for rental income to its current market price (IAS 40).
Transfer: Inventory to Investment Property
Moving a completed apartment from 'For Sale' (Inventory) to 'For Rent' (Investment Property).
Monthly Accrual for Annual Property Tax
Estimating and recording the monthly portion of an annual property tax bill for an office or warehouse.
Rent Collected on Behalf of Owner (Agency)
How a property management company records rent received from a tenant that belongs to the landlord.
Cash Purchase of Commercial Building
Recording the outright purchase of a commercial building paid in full.
Mortgage-Financed Property Purchase
Buying a building with a 20% down payment and an 80% bank mortgage.
Title Registration & Legal Fees (Capitalized)
Capitalizing legal fees, title registration costs, and notary charges into the cost of the property.
Property Transfer Tax (Land Registration Fee)
Recording the government transfer tax paid when registering a property in Jordan.
Pre-Acquisition Due Diligence Costs
Paying for property surveys, environmental assessments, and structural inspections before completing a purchase.
Failed Property Acquisition Costs (Expensed)
Writing off legal and survey costs for a property deal that did not complete.
Land and Building Cost Allocation
Splitting a lump-sum property purchase price between land and building based on an independent valuation.
Buyer's Broker Commission on Acquisition
Capitalizing the real estate agent's commission paid when purchasing a property.
Contractor Progress Billing (CIP)
Recording a milestone payment to the main contractor as construction progresses.
Architect & Engineering Fees (CIP)
Capitalizing design and engineering consultancy fees into the construction project cost.
Building Permit & Municipality Fees (CIP)
Capitalizing the government permit fees required to legally commence construction.
Capitalized Borrowing Costs — Construction Loan (IAS 23)
Adding monthly interest on a construction loan to the CIP asset during the build period.
Contractor Retention Withheld (CIP)
Withholding 10% of each progress payment as retention until project completion and defects period.
Release of Contractor Retention
Paying the retained amount to the contractor after the defects liability period ends.
Transfer of CIP to Fixed Asset (Completion)
Reclassifying the completed building from Construction in Progress to a depreciable Fixed Asset.
Construction Change Order — Scope Increase
Recording additional costs approved under a variation order from the developer to the contractor.
Contractor Delay Penalty (Liquidated Damages)
Deducting a penalty from the contractor's payment for failing to complete on time.
Infrastructure Contribution to Municipality
Paying a mandatory infrastructure levy to the municipality as a condition of the building permit.
Initial Recognition of Investment Property (at Cost)
Recording a building purchased specifically to generate rental income as an investment property under IAS 40.
Investment Property Annual Fair Value Gain
Increasing the carrying value of an investment property following an independent valuation.
Investment Property Annual Fair Value Loss
Reducing the carrying value of an investment property when market values decline.
Transfer: Owner-Occupied Property → Investment Property
Reclassifying a building the company previously used itself, now leased out to a third party.
Transfer: Investment Property → Inventory (for Sale)
Moving a building from Investment Property to inventory when the developer decides to sell it.
Disposal of Investment Property — Gain
Recording the sale of an investment property for more than its carrying value.
Disposal of Investment Property — Loss
Recording the sale of an investment property for less than its carrying value.
Off-Plan Unit Sale — Initial Deposit Received
Recording a booking deposit from a buyer for an apartment that has not yet been built.
Off-Plan Instalment Collection
Collecting a construction-linked instalment from an off-plan buyer as per the payment schedule.
Revenue Recognition at Unit Handover (IFRS 15)
Recognizing the full sale price as revenue when a completed apartment is handed over to the buyer.
Cost of Sales Recognition at Handover
Recognizing the construction cost of a completed unit as Cost of Sales when it is handed over.
Sale of Completed Unit (Cash)
Recording the sale of a ready residential unit paid in full by the buyer.
Sale of Completed Unit (Buyer Uses Mortgage)
Recording a unit sale where the buyer finances the purchase through a bank mortgage.
Sales Broker Commission Expense
Recording the commission paid to an external real estate agent for closing a unit sale.
Buyer Cancellation — Deposit Forfeited
Retaining a buyer's deposit when they cancel the purchase agreement per the contract terms.
Buyer Cancellation — Deposit Refunded
Refunding a buyer's deposit when the developer is at fault for the cancellation.
Post-Handover Payment Plan (Receivable)
Recording a receivable for the balance of a unit price to be paid after handover over 3 years.
Sale of Raw Land Plot
Recording the sale of an undeveloped land plot to another developer.
Monthly Rental Income Recognition
Recognizing one month of earned rental income from a commercial tenant.
Advance Rent Received (Unearned)
Recording 12 months of rent received upfront from a commercial tenant at lease commencement.
Monthly Recognition of Advance Rent
Recognizing one month of rental income from the previously collected advance.
Straight-Line Lease Revenue (With Rent Escalation)
Recording rental income on a straight-line basis over a lease with annual rent increases.
Tenant Security Deposit Received
Recording a refundable security deposit paid by a new tenant at lease commencement.
Tenant Security Deposit Refund
Returning a tenant's security deposit at the end of the lease after inspection.
Tenant Deposit Partially Forfeited (Damage)
Retaining part of a tenant's deposit to cover the cost of repairs after they vacate.
Late Rent Payment Penalty
Charging a tenant a penalty fee for paying rent after the contractual due date.
Service Charge Billed to Tenant
Billing a commercial tenant for their share of common area maintenance (CAM) costs.
Vacancy — Reversal of Rental Accrual
Reversing accrued rental income for a unit that becomes vacant mid-month.
Property Management Fee Revenue
Recording the monthly management fee earned for managing a property on behalf of an owner.
Maintenance Cost Recharged to Owner
Passing through a plumbing repair cost to the property owner after arranging the fix.
Owner Net Rental Distribution
Remitting the net rental proceeds to the property owner after deducting management fees and expenses.
Vacancy Loss Provision
Estimating and recording the expected income loss from a unit that is currently empty.
Building Maintenance Expense
Recording routine maintenance costs for a managed property (painting, minor repairs).
Facilities Management Contract (Annual)
Paying an FM company annually to manage the building's technical systems and maintenance.
Elevator / Lift Annual Service Contract
Paying the annual maintenance fee for elevator certification and servicing.
Common Area Utilities (Electricity / Water)
Recording utility costs for shared areas — lobbies, parking, corridors — in a multi-tenant building.
Annual Property & Liability Insurance
Paying the yearly insurance premium covering the building structure and public liability.
Security Guard Service (Monthly)
Recording the monthly cost of a contracted security company for the building.
Landscaping & Cleaning Services
Monthly payment to a company for maintaining gardens and common area cleanliness.
Owners Association Sinking Fund Contribution
Making a monthly contribution to the building's sinking fund for future major repairs.
Sinking Fund Release for Major Repair
Using accumulated sinking fund cash to pay for a major roof replacement.
Mortgage Loan Drawdown
Receiving the first tranche of a construction mortgage from the bank.
Monthly Mortgage Repayment (Principal + Interest)
Recording the monthly installment on a property mortgage.
Loan Origination Fee Amortization
Monthly amortization of the upfront bank arrangement fee on a property mortgage.
Mortgage Refinancing — Gain on Early Settlement
Settling an existing mortgage early at a discount and recording the gain.
Escrow Release on Project Completion
Releasing restricted escrow funds to the developer upon obtaining the building completion certificate.
Mezzanine Finance Drawdown
Receiving subordinated debt from a mezzanine lender to top up the equity gap in a development.
Building Depreciation (Straight-Line)
Monthly depreciation charge on a commercial building over its useful life.
Component Accounting — Roof Replacement
Capitalizing a new roof as a separate asset component and removing the old roof's book value.
Component Depreciation — HVAC System
Monthly depreciation on the building's central air conditioning system as a separate component.
Impairment of Building (PPE)
Writing down a building's carrying value when its recoverable amount falls below book value.
Sale of Owner-Occupied Building — Gain
Removing a building and its accumulated depreciation and recording the profit on sale.
Sale of Owner-Occupied Building — Loss
Recording a loss when a building is sold for less than its net book value.
Demolition of Existing Structure
Writing off an old building on purchased land that must be demolished before new construction.
IFRS 16 Lease — Initial Recognition (Lessee)
Recording a Right-of-Use asset and lease liability when signing a long-term office or retail lease.
IFRS 16 Monthly Lease Payment Split
Splitting the monthly lease payment between principal reduction and interest expense.
Right-of-Use Asset Depreciation
Monthly depreciation of the ROU asset over the shorter of the lease term or the asset's useful life.
Impairment of Right-of-Use Asset
Writing down an ROU asset when the leased space is no longer needed (e.g., vacated early).
VAT on Property Sale (Jordan)
Recording the 16% Sales Tax on the sale of a commercial property in Jordan.
VAT on Commercial Rental Income
Adding 16% VAT to a commercial rental invoice in Jordan.
Capital Gains Tax Provision on Property Sale
Accruing the estimated tax on the profit made from selling a property.
Withholding Tax on Rental Income (Tenant Deducts)
Recording rental income net of 5% withholding tax deducted by the corporate tenant.
Deferred Tax on Revaluation Surplus
Recording the deferred tax liability arising from an upward revaluation of an investment property.
Zakat on Real Estate Assets (Saudi Arabia)
Accruing Zakat on property development inventory and real estate assets held by a KSA company.
Owners Association Annual Fee
Paying the annual strata or homeowners association fee for a unit owned in a managed development.
Municipality Building Levies
Recording annual municipality levies charged on commercial and residential buildings.
Sale-and-Leaseback Transaction — Gain
Selling an office building and immediately leasing it back, recording the gain under IFRS 16.
Land Contribution to Joint Venture
Contributing land to a real estate JV in exchange for a 50% ownership stake.
Joint Venture Share of Profit (Equity Method)
Recording the company's share of a real estate joint venture's annual net income.
VAT Input on Construction Costs
Recording recoverable VAT paid on contractor invoices during the construction phase.
Provision for Post-Handover Snagging
Accruing the estimated cost of defect repairs expected after handing units over to buyers.
Property Marketing & Show Unit Costs
Recording the cost of building and furnishing a show apartment for sales purposes.
Pre-Opening Operating Costs (Expensed)
Recording costs incurred before a completed building is ready to generate rental income.
Annual Property Tax Monthly Accrual
Accruing one-twelfth of the annual property tax each month.
Goodwill on Acquisition of Property Portfolio
Recording goodwill when acquiring a real estate company for more than the fair value of its property assets.
Reclassification of Current Portion of Mortgage
Moving the portion of a mortgage due within the next 12 months from long-term to current liabilities.
Intercompany Loan for Property Development
Recording a loan from the parent company to a subsidiary SPV set up for a development project.
Equity Injection into Development SPV
The parent company subscribing to shares in a newly formed project SPV.
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