FASB Determines How Companies Should Book Gains From Partial Sales of Real Estate

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April 8 — In accounting for partial sales of nonfinancial assets, such as real estate, a gain should only be recognized if the legal entity isn't consolidated by the seller and the other criteria in revenue accounting are met, the Financial Accounting Standards Board tentatively decided.

Companies would look at the entity and see if it was still consolidated, according to April 7 board discussions. If it is still consolidated, no gain would be recognized. However, if it was deconsolidated, then companies would have to look at the new revenue standard to determine whether or not that partial interest had transferred, the board agreed.