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This proposed statement of position (SOP) provides guidance for the optional reporting of supplemental current-value information by real estate entities, substantially all of whose assets are real estate and substantially all of whose operations consist of real estate activities. Supplemental current-value information may be reported in a separate supplemental balance sheet or may be presented on the face of the entity's general-purpose, historical-cost balance sheet if the information is clearly identified as supplemental information prepared on the basis of current value to the entity. Current value to the entity, as used in this proposed SOP, refers to the estimated value of a reporting entity's assets and liabilities based on the entity's intent and ability to realize asset values and settle liabilities. Current value to the entity is based, directly or indirectly, on the discounted amount of net cash flows expected to be realized by the reporting entity. In this proposed SOP, current value to the entity refers to the value of specific balance-sheet elements â€” not to the value of the entity as a whole. The supplemental current-value information should be accompanied by a disclosure of changes in revaluation equity. This proposed SOP should be applied to supplemental current-value information reported for fiscal years, and interim periods in such fiscal years, beginning after December 15, 1995. Restatement of comparative annual financial statements for earlier years is encouraged but not required.
Real property -- Valuation -- Accounting -- Standards; Real estate business -- United States -- Accounting
Accounting | Taxation
American Institute of Certified Public Accountants. Real Estate Committee, "Proposed statement of position : Reporting by Real Estate Companies of supplemental current-value information;Reporting by Real Estate Companies of supplemental current-value information" (1994). Statements of Position. 601.