Real Estate Investment Trusts (REITs) Knowledge Center
Explore our verified library of Real Estate Investment Trusts (REITs) transactions. Every entry is reviewed for IFRS compliance and real-world accuracy by our technical accounting team.
UPREIT Formation — Property Contributed for Operating Partnership Units (Tax-Deferred Exchange)
Recording the contribution of real property to a UPREIT's Operating Partnership in exchange for OP units — a tax-deferred transaction where the contributor avoids immediate capital gains recognition while the OP records the property at fair value.
OP Unit Redemption — Cash Redemption or REIT Share Conversion at Fair Value
Recording the redemption of Operating Partnership units — either for cash (creating a buyout of the non-controlling interest) or for REIT common shares (a non-taxable exchange for the REIT, taxable for the OP unit holder).
Straight-Line Rent — Recognizing Level Revenue Over Lease Term Despite Escalating Cash Rents
Recognizing base rent on a straight-line basis over the full lease term — creating a straight-line rent receivable when cash rents are below the straight-line average and a deferred revenue liability when cash rents exceed it.
Tenant Reimbursements (CAM) — Common Area Maintenance and Operating Expense Recoveries
Recognizing tenant reimbursements for common area maintenance, property taxes, and insurance — as a component of rental revenue, with the tenant's share of actual costs billed annually and estimated monthly.
Property Acquisition — Asset Acquisition PPA (Land, Building, Lease Intangibles)
Allocating the purchase price of an acquired property — identifying land, building, above/below-market leases, in-place lease intangibles, and tenant relationships under the asset acquisition framework.
Above-Market and Below-Market Lease Amortization — Rental Revenue Adjustment
Amortizing acquired above-market lease intangibles as a reduction of rental revenue and below-market lease liabilities as an increase — adjusting recognized rent toward market rates over the remaining lease terms.
Funds From Operations (FFO) — NAREIT Definition Reconciliation from GAAP Net Income
Computing FFO — the industry-standard performance metric for REITs — by adding back real estate depreciation and amortization, and gains/losses on property sales to GAAP net income.
REIT 90% Distribution Requirement — Dividend Accrual to Maintain REIT Status
Accruing the minimum dividend required to maintain REIT qualification — the 90% of REIT taxable income distribution requirement that drives REIT capital allocation decisions.
Taxable REIT Subsidiary (TRS) — Conducting Prohibited Activities Through a Taxable Subsidiary
Accounting for a Taxable REIT Subsidiary — the entity that allows the REIT to engage in activities prohibited for REITs (hotel operations, development services, third-party management) while maintaining REIT status.
Real Property Depreciation — Straight-Line Over 39 Years (Non-Residential) and Recurring CapEx
Recording depreciation of commercial real estate assets and distinguishing capitalized improvements from expensed maintenance — the largest non-cash item on a REIT's income statement.
Property Disposition — Gain on Sale of Real Estate (ASC 610-20)
Recording the gain on sale of a real property — applying ASC 610-20 to recognize the full gain when control transfers to the buyer at closing.
IRC §1031 Like-Kind Exchange — Tax-Deferred Property Swap for REIT
Recording a 1031 like-kind exchange where the REIT sells one property and acquires another within 180 days — recognizing the gain for GAAP purposes but deferring it for tax, creating a deferred tax liability.
Real Estate Impairment — Undiscounted Cash Flow Test and Fair Value Write-Down (ASC 360)
Testing a real property for impairment — first with an undiscounted cash flow recoverability test, then measuring impairment as the excess of carrying value over fair value.
Real Estate Joint Venture — Equity Method Accounting for Unconsolidated JV
Recording the REIT's investment in an unconsolidated real estate joint venture under the equity method — recognizing the REIT's proportional share of JV income, distributions, and the equity method carrying value.
Net Lease REIT — Triple-Net Lease Revenue (Tenant Pays All Operating Expenses)
Recording revenue on a triple-net (NNN) lease — where the tenant pays base rent plus all property operating expenses directly — resulting in a simpler revenue model with lower gross revenue but higher net margin.
CMBS Mortgage — Commercial Mortgage-Backed Securities Financing on Real Property
Recording a fixed-rate CMBS mortgage loan secured by a commercial property — with deferred financing costs, premium/discount amortization, and the specific accounting considerations of securitized real estate debt.
Adjusted FFO (AFFO) — Deducting Recurring Capital Expenditures from FFO
Computing AFFO by deducting recurring maintenance capital expenditures and straight-line rent adjustments from FFO — providing a more accurate measure of cash available for distribution.
Hotel REIT — RIDEA Structure (TRS Operating Hotels with Qualified Management Contract)
Recording hotel REIT economics under the REIT Industry Directive Enforcement Act (RIDEA) structure — where the TRS operates hotels directly, recognized as hotel revenue and expenses through the consolidated REIT.
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