Fair value reporting for investment properties under US GAAP

Fair value reporting for 

investment properties 

under US GAAP 

August 2010 

1

Table of contents 

Executive summary .......................................................................................................................................................1 

History of the US investment property standard proposal...............................................................................................1 

History of investment property standard under IFRS......................................................................................................3 

Definition of investment property under IAS 40 ..............................................................................................................4 

Examples of investment property under IAS 40..............................................................................................................6 

Difficulties in applying IAS 40 and Fair Value Accounting for Investment Property .........................................................6 

Potential issues in applying an investment property standard in the United States.........................................................7 

Timetable for the proposed standard ...........................................................................................................................10 

Contact us ...................................................................................................................................................................11

Executive summary 

At its July 14, 2010 meeting, the Financial Accounting Standards Board ("FASB") tentatively decided to issue a 

proposed Accounting Standard Update (“ASU”) to attempt to achieve convergence with International Accounting 

Standards (“IAS”) on accounting for investment properties. However, the FASB concluded that, as opposed to the 

international accounting standard on investment property, which provides an option to account for investment property 

at cost or fair value, the US standard, would require an investment property to be measured at fair value. This new 

guidance is partially driven by the recently issued Exposure Draft for leasing. Assuming that both standards are 

adopted, lessors who are in the scope of the investment property guidance would not apply the new leasing standard. 

An investment property is defined as real estate (including integral equipment) held by the owner or held on a finance 

lease (under certain circumstances operating leases may also be classified as investment properties) to earn rentals, 

for capital appreciation, or both. This does not include owner-occupied property, property held for sale in the ordinary 

course of business (e.g., residential homes held by a home builder), or property constructed on behalf of third parties. 

The exposure draft could be issued as early as September 2010, with an abbreviated comment letter period expected 

to end December 15, 2010 (concurrently with that of the exposure draft on the Lease Project issued in August). If 

completed, it is expected that the new investment property standard will be adopted concurrently with the proposed 

new leasing standard. The date of adoption of the new leasing standard has not yet been determined, but could be as 

early as 2013/2014. 

Who could be affected? 

This new guidance will have broad implications to many owners/investors in real estate and could impact the following entities: 

• Real Estate Investment Trusts (REITs) 

• Real Estate Operating Companies (REOCs) 

• Insurance companies (e.g., general account investments) 

• Banks (e.g., real estate investments and some OREO assets) 

• Owner entities for “non-traditional” real estate that may be “leased” under take or pay/power purchase arrangements – including power 

plants, oil/gas pipelines, wind/solar farms, and production facilities 

• “Property Companies” in “OPCo./PropCo” structures used by private equity firms for certain portfolio investments 

• Owners of properties leased to other affiliated companies 

• Franchisors that lease property to franchisees 

• All other investors in rental real estate 

History of the US investment property standard proposal 

As part of the overall convergence efforts, the FASB and the International Accounting Standards Board (“IASB”) 

recently completed an exposure draft for their joint project on accounting for leases, which will result in significant 

changes to the accounting model for leases. The IASB included a scope exception within the exposure draft that if a 

lessor of “investment properties” measures those properties at fair value in accordance with International Accounting 

Standards (“IAS”) 40, Investment Property (“IAS 40”), it would not apply the proposed new lessor accounting 

requirements to the lease. Instead, it would continue to account for those leases as operating leases, as specified in 

IAS 17, Leases. This decision assumes that fair value is a more informative and preferred model. Currently, there is no 

Fair value reporting for investment properties 1 PricewaterhouseCoopers

equivalent US standard that allows for investment properties to be measured at fair value and there would be no basis 

for excluding investment properties from the new proposed lessor accounting requirements. 

To remedy this lack of consistency between IASB and FASB guidance, and at the request of some participants in the 

real estate industry, the FASB announced at its March 10, 2010 meeting that it was adding a project to its agenda to 

consider whether entities should be given the option (or potentially be required) to measure an investment property at 

fair value through profit and loss (FVTPL). A similar project previously had been on the FASB’s agenda under phase 

two of the fair value option project, but was removed from the agenda in October 2008, partially because of resistance 

to optional fair value accounting by the SEC Advisory Committee on Improvements to Financial Reporting and 

concerns about the use of fair value models in general for "non-traded" assets. Staff resource constraints are also 

believed to have played a role in the original removal of the project from the agenda, with the expectation that the 

United States would ultimately adopt IFRS, including IAS 40. 

At its July 14, 2010 meeting, the FASB discussed the investment property project and certain proposed models put 

forth by the staff. Rather than starting with a new model, the FASB tentatively decided to issue a proposed Accounting 

Standard Update using IAS 40 as a basis, however the ASU would require an investment property to be measured at 

fair value. The FASB recognized that its tentative decision would not achieve complete convergence with IAS 40, which 

permits, but does not require, investment properties to be measured at fair value. Nonetheless, the FASB instructed the 

staff to begin drafting the ASU and to continue to reach out to constituents and hear their concerns and thoughts. It is 

also possible that the IASB will amend IAS 40 to be consistent with this new ASU and require the use of fair value for 

investment properties. The exposure draft for Accounting for Investment Properties could be issued as early as 

September 2010, with a comment period to end contemporaneously with that of the lease standard (i.e., December 15, 

2010). 

In the United States there are certain entities that currently report investment property at fair value, including pension 

funds and entities that are considered to be investment companies under ASC 946 (formerly the AICPA Audit and 

Accounting Guide - Investment Companies). As part of the convergence project on consolidation, the IASB is nearing 

the issuance of an exposure draft on the definition of an investment company, a designation that did not previously 

exist in IFRS. The discussion to date bears striking similarities to SOP 07-1, Clarification of the Scope of the Audit and 

Accounting Guide "Investment Companies" and Accounting by Parent Companies and Equity Method Investors for 

Investments in Investment Companies, issued by the AICPA in 2007 and subsequently indefinitely deferred. If the 

FASB adopts a similar definition or ultimately converts to IFRS, entities will need to re-evaluate whether they are or are 

not investment companies under the new guidance; and if not, if they would no longer be able to report as investment 

companies. In some cases, certain real estate entities (generally vertically integrated property operating companies) 

may no longer qualify as investment companies, but many investors in those entities may still need fair value 

information for their own reporting (e.g. pension funds). If adopted by the FASB, this new guidance on investment 

properties may provide some relief for those funds that would no longer be within the scope of an investment company, 

by requiring investment properties to be reflected at fair value under non-investment company US GAAP. On the other 

hand, because of the definition of “investment property” within IAS 40, some investments, such as hotels and assistedliving 

facilities, which had historically been reported by these investment company entities at fair value, may no longer 

have a basis to be reported at fair value because the entities owning such property may not be investment companies 

and the property may not meet the definition of an investment property. 

For entities that historically have not been deemed to be investment companies, but which have owned or operated 

rental properties, the current reporting model is based on the historical cost of the property as adjusted for depreciation 

and impairment. Depending on the type of underlying properties, this includes many of the real estate investment trusts 

(REITs) and real estate operating companies (REOCs). In addition, many financial institutions, such as banks and 

insurance companies, which hold such investments for their own account (i.e., “general account” investments), will also 

be affected if these investments meet the definition of investment property. Absent the ability to reconsider fair value 

elections on related debt financing these investments (both recourse and non-recourse), many of these financial 


institutions could have mismatches, creating unusual net results with liabilities carried at amortized cost. IAS 39.9 

allows the classification of such liabilities at FVTPL in order to eliminate a mismatch (where applicable). 

This new FASB guidance could also affect owners of “non-traditional” real estate, such as production facilities, power 

plants, wind/solar farms, or pipelines, which otherwise may meet the definition of an investment property, and which 

are subject to “leases,” either directly or through take-or-pay contracts or power purchase contracts under ASU 840-10- 

15 (formerly EITF 01-8). While international standards (International Financial Reporting Interpretations Committee 

["IFRIC"] 4) have equivalent lease definitions, whether or not they were considered investment property under IAS 40 

has not been a focus for owners of these assets because fair value reporting has been optional. In addition, due to the 

complexities of valuation, historical cost has generally been elected. Since the FASB’s new investment property 

standard would not allow for such an option, the evaluation of whether these are considered “investment properties” will 

be critical. 

Banks and other financial institutions also receive property in foreclosure (i.e., other real estate owned or “OREO” 

assets) that they may hold for sale/rent for a period of time to maximize their returns/recovery. These OREO assets 

may meet the definition of an investment property and may be required to change from the current historical cost model 

to a fair value model once obtained in foreclosure until their ultimate disposal. 

Many historical cost-reporting entities, such as REITs/REOCs, have long disagreed with the concept of depreciating 

“appreciating assets,” which has lead them to provide the market with alternative measures of performance, such as 

Funds from Operations (“FFO”). FFO excludes the impact of depreciation of these real estate assets from earnings. 

Others have argued that the asset on the balance sheets of REIT and REOCs were not comparable among companies 

because property acquisitions are recorded at historical cost at the time of acquisition (which is at different times for 

different acquisitions and different companies) and subsequently were depreciated using a method that doesn’t 

necessarily reflect the real economic decline in value of a property. These industry participants believe that fair value 

reporting would improve the relevance of financial reporting. Critics of the fair value model note that real estate 

valuations are generally level 3 under the current fair value framework and point to the inherent uncertainty of 

valuations and potential differences of assumptions such as market rents or discount and cap rates by different parties 

for similar properties. These critics believe that fair value reporting would not improve the comparability of financial 

statements among different real estate companies. Ultimately, it remains to be seen whether the public markets will 

embrace this change or not. 

History of investment property standard under IFRS 

Prior to the adoption of IFRS, the accounting for investment 

properties was governed by local GAAP. Although the accounting 

in each jurisdiction varied, it generally followed either the 

historical cost model or the revaluation model, or an option to 

choose between the two. The cost model was based on the 

historical cost of the property as adjusted for depreciation and 

impairment. Under the revaluation model, properties were carried 

at fair value, with changes in fair value recorded in equity. The fair 

value model, in which properties are carried at fair value with 

changes in fair value through profit or loss, was generally not 

applied internationally prior to the adoption of IAS 40. Under IFRS 

(specifically IAS 40), the initial measurement of an investment 

property is its purchase price plus any directly attributable 

transaction costs. Subsequent to initial measurement, 

Fair value reporting for investment properties 3 PricewaterhouseCoopers 

Global Survey of listed Investment 

Property owners* 

8% 

92% 

Applied the fair 

value model for 

subsequent 

measurement 

of investment 

property 

Applied the 

cost model 

* In a 2008 global survey of listed investment property owners 

conducted by PricewaterhouseCoopers - 50 entities surveyed.

management makes a policy election to either carry an investment property at fair value, or at cost (less depreciation 

and impairment). 

In practice, the vast majority of companies in most jurisdictions that apply IFRS have elected to carry their investment 

properties at fair value. In certain jurisdictions, there has been less use of fair value because of a lack of valuation 

infrastructure or for competitive reasons. However under IFRS, when a company elects the cost model, they must still 

disclose fair value information. In addition, the adoption of IAS 40 took place during a period when real estate values 

were generally increasing, and this undoubtedly created a bias toward the use of the fair value model. It is not clear, 

however, how the percentage for those electing fair value would have changed if the adoption of IAS 40 had occurred 

in a poor economic environment with declining real estate values. The policy chosen is applied consistently to all of the 

investment properties that the entity owns (i.e., it cannot be applied selectively), and a change from one model to the 

other can be made only if it will result in a more appropriate presentation. As noted specifically in IAS 40, however, a 

change from fair value to cost is not likely to be considered a more appropriate presentation and is generally not 

acceptable. Once elected, there is effectively no going back. 

Definition of investment property under IAS 40 

Investment property is defined under IAS 40 as: 

• Property held by the owner; held on a finance lease to earn rentals or for capital appreciation; or both 

• Existing investment property that is being redeveloped for continued use as an investment property in the future 

Effective in 2008, investment properties in the course of construction or development are also within the scope of IAS 

40 (previously they were accounted for as Property, Plant, and Equipment ("PPE") at historical cost until the completion 

of the construction). Where fair value is elected under IAS 40, such a property is generally measured at fair value; 

however, if the value of the investment property under construction is not reliably measurable, it is measured at cost 

until the earlier of the date construction is completed or the date at which fair value becomes reliably measurable. 

The following are examples of investment property under IAS 40: 

• Land held for long-term capital appreciation rather than for short-term sale in the ordinary course of business 

• Land held for a currently undetermined future use If an entity has not determined that it will use the land as owneroccupied 

property or for short-term sale in the ordinary course of business, the land is regarded as held for capital 

appreciation. 

• A building owned by the entity (or held by the entity under a finance lease) and leased out under one or more 

operating leases 

• A building that is vacant but is expected to be leased out under one or more operating leases 

• Property that is being constructed or developed for future use as investment property 

The definition specifically excludes the following: 

• Owner-occupied property 

• Property intended for sale in the ordinary course of business 

• Property being constructed on behalf of third parties 


Leasehold interests 

A property interest that is held by a lessee (i.e., a lease “In” or a “Head Lease”) under an operating lease may be 

classified and accounted for as investment property, provided that it meets the following criteria: 

• All other definition criteria of investment property are met 

• The operating lease is accounted for as if it were a finance lease 

• The lessee uses the fair value model 

This allows leasehold interests under operating leases which would otherwise have no carrying value to be accounted 

for as investment property. For example, a leasehold interest in land would normally be an operating lease under 

current international leasing standards; without this special treatment, there would have been no asset to reflect at fair 

value. If the new lease model is finalized as currently proposed, there will no longer be a need for this specialization 

since there would be a right-to-use asset recorded. 

Multipurpose property 

Separate accounting should be applied where a property is used for both investment purposes and administrative 

or/productive purposes. One portion should be accounted for as an investment property and the other as PPE. 

Separate accounting can be applied only if it is possible for the portions to be sold separately (or leased separately 

under a finance lease). The existence of a third-party lessee indicates that a separate sale or finance lease is possible. 

If they cannot be sold separately, the entire property is treated as investment property only if an insignificant portion is 

held for use in the production or supply of goods or services or for administrative purposes. 

Services provided to occupants of property 

In cases where an entity provides ancillary services to occupants of a property owned by the entity, the property is 

considered an investment property if such services are a relatively insignificant portion of the arrangement as a whole. 

If such services are more significant, such as in a hotel, the property is treated not as investment property, but as an 

owner-occupied property. Significant judgment is required to determine whether a property qualifies as investment 

property when ancillary services are provided. 

Property occupied by group members, associated companies, or joint ventures 

In cases where property is leased from one member of a group to another, and occupied by that other, the property is 

not an investment property from the standpoint of the consolidated group as a whole -- that is, it is not treated as 

investment property in the consolidated financial statements. However, it may qualify as investment property in the 

individual financial statements of the group company that is the lessor, if it meets the other conditions set out in the 

definition. 

Property occupied by an associated company or joint venture accounted for using the equity method should be 

accounted for as investment property in the consolidated financial statements. Associates and joint ventures accounted 

for using the equity method are not part of the consolidated group, and therefore the property is not owner occupied 

from the group’s perspective. 


Examples of investment property under IAS 40 

The model does not easily lend itself to broad categorization of investment properties by property type without 

consideration of the facts and circumstance specific to the property. The evaluation of whether a property is considered 

investment property under IAS 40 depends on the nature and purpose of the activities conducted at the property and 

which party conducts those activities. Accordingly, careful consideration is warranted of the types and significance of 

services rendered. An entity treats a property as investment property, even if it provides ancillary services to the tenant, 

if those services are considered insignificant to the arrangement as a whole and assuming all other criteria have been 

met; for example, in a case where the owner of an office building provides security and maintenance services to the 

lessees who occupy the building. On the other hand, those services could be significant for other property types which 

may not qualify as investment property. For example, an entity that owns and manages a hotel (or hires a third-party 

manager), where services to guests would generally be significant to the arrangement as a whole, may consider the 

property to be “owner-occupied property” rather than investment property. 

The following table illustrates how similar “traditional real estate” property types may be classified differently under 

IAS 40: 

Property type Qualifying as investment property Not qualifying as investment property 

Land Land held for investment or undetermined future 

use 

Hotel Hotel leased to third-party hotel operator. 

Owner’s role is that of a passive investor and 

exposure to variability in cash flows is limited. 


Land held for development and sale in the short 

term 

Hotel managed by owner or third-party hotel 

manager. Owner is involved in significant 

operating decisions and exposed to variability in 

operating cash flows. 

Retail store Retail store leased to retailer Retail store owned and operated by retailer 

Office building Office building leased to tenant as corporate 

headquarters 

Apartment building Typical apartment building with long-term leases 

and basic services provided to tenants (e.g., 

security and maintenance). 

Office building used by owner as corporate 

headquarters 

High-end apartment building with short-term 

leases and significant ancillary services provided 

to tenants, including services provided for a fee 

(e.g., on-site restaurant, health spa). 

Since nontraditional real estate, such as power plants, pipelines, cell towers, wind/solar farms, and leases to 

franchisees, generally involve substantial ancillary services, there will be significant judgment in the evaluation of 

whether these would constitute investment property. 

Difficulties in applying IAS 40 and Fair Value Accounting for 

Investment Property 

The following areas may require special attention under IAS 40: 

• Movement between categories (PPE vs. inventory vs. investment property) 

• Complexities of valuing development property

• Adequacy of local valuation infrastructure in some jurisdictions and level of available market information (impact of 

recent financial crisis) 

• Frequency of using management valuations vs. external appraisals 

• Leasing as lessor: When applying the fair value option under IAS 40 today , companies generally report rental 

income for operating leases on a straight-line basis for non-cancelable lease terms. US entities applying fair value 

accounting as investment companies or as pension plans do not apply the straight-line rent model but instead 

reflect revenue on a contract accrual basis. 

• Leasing as lessee: Today, when applying IAS 40 to value an investment property, land leases are allowed to be 

accounted for as “finance leases” in order to have an asset that can be adjusted to fair value. 

• Deferred tax issues: It is not uncommon for international real estate transactions to be effectuated by so-called 

“wrapper” transactions (i.e., the purchase of the stock of an entity whose sole asset is the investment property). 

These entities are often taxable structures. If the transaction is a business combination, this poses a significant 

problem with what to do with the “inside” basis differential and related deferred tax liabilities in purchase 

accounting. Since this type of transaction is common, it is possible that the deferred taxes will never be paid, but 

rather passed on to the next buyer. In addition, transaction costs on a business combination are expensed 

immediately. 

• Disclosure: How to get transparency and the reality of proprietary information when trying to achieve the right 

balance between comparability and relevancy of fair value reporting. 

Potential issues in applying an investment property standard in the 

United States 

The overall impact of applying IAS 40 and a requirement of fair value reporting for investment properties is uncertain 

and may vary widely for specific companies, depending on such factors as property type, market conditions, and when 

the property was originally acquired. 

In the United States, most investment properties held by noninvestment companies/pension funds have been reflected 

in financial statements using historical-cost models and generally classified as “held-and-used” assets subject to 

impairment review. This review requires a two-step approach for impairment. If the gross cash flows from property 

operations exceed the carrying value of the asset, then no impairment write-down is necessary. If the gross cash flows 

do not exceed the carrying value of the asset, then the asset must be written down to its fair value. It is conceivable 

that assets that would be impaired on a fair value basis have not yet reflected impairment write-downs because of this 

two-step approach. Conversely, assets that have been held for extended periods of time and that have reflected 

significant depreciation charges may require significant write ups. 

The FASB has already stated that the proposed ASU will not be identical to IAS 40 because it will not include an option 

to use historical cost. However, the writing of the Exposure Draft should not be as easy as taking IAS 40 verbatim and 

making the change to eliminate the option to use historical costs. Among other things, a number of technical 

corrections would be needed, as well as some integration issues or outright conflicts with other US accounting 

standards, which would need to be addressed. There are also some practical and regulatory issues to confront. A brief 

discussion of each of these issues follows. 


Technical corrections, integration, and conflict resolution 

In addition to eliminating the ability to use historical cost, rule makers will need to consider other technical matters, 

including (but not limited to) the following points. Some of these issues may be addressed by the IASB as technical 

corrections to standards: 

• Revising links to lease accounting – Existing references to lease accounting literature in IAS 40 for operating leases 

will need to be eliminated, as that literature will no longer exist with the completion of the proposed new leasing 

standard. Further, it is likely that the revenue model will convert from the straight-line rent model used today to 

something more like a contract accrual basis – which is more consistent with fair value accounting for investment 

companies. “Leases in” (e.g., underlying ground leases) could be accounted for consistent with the proposed new 

leasing standard, but the resulting asset will need to be included in the carrying value of the investment property. 

• Fair value premise – It is expected that the fair value premise will be consistent with ASC 820 (formerly SFAS 157). 

Among other things, this will require consideration of “highest and best use” of the property, as well as appropriate 

documentation of all significant assumptions. Sensitivity disclosures required by ASU 820 are also difficult to 

provide for real estate valuations, which are affected by many interconnected assumptions, including discount 

rates, cap rates, market rental rates, property operating costs, and capital expenditure costs. 

• Reconsideration of existing fair value option elections for related real estate financing - As part of the 

transition to the new Investment Property accounting in the US, existing fair value option guidance for financial 

assets and liabilities may need to be modified to allow impacted entities to reconsider existing elections in place for 

financing associated with the investment property. Absent the ability to reconsider fair value elections on related 

financing, entities including financial institutions could have mismatches, creating unusual net results with liabilities 

carried at amortized cost. 

• Business combinations – There is a perceived conflict with the business combinations guidance in ASC 805 

[formerly SFAS 141(R)] since most accounting practitioners in the US believe that ASC 805 currently includes the 

acquisition of rental real estate in its scope as business combinations, which would be defined as investment 

property under IAS 40. ASC 805 requires different accounting than the model used for investment companies -including 

whether to expense or capitalize transaction costs; and the requirement under ASC 805 to allocate 

purchase price amongst tangible and intangible assets and liabilities relating to the lease contracts that may be part 

of the investment property. The business combination rules under ACS 805 and IFRS 3(R) were created under a 

joint project and are nearly identical. However, internationally, many believe that: 

- Investment properties would not be considered as businesses under IFRS 3(R) 

- The guidance to fair value investment properties should specifically exclude investment properties from 

certain aspects of IFRS 3(R), such as expensing transaction costs and allocating purchase basis to 

acquired lease intangibles (e.g., above/below market rents, in-place lease value, tenant relationship 

value). 

It is expected that IFRS will likely address this issue in connection with its post-two-year implementation review of 

IFRS 3(R). 

In the United States, substantially all rental real estate is considered a business under ASC 805; consequently, 

transaction costs are expensed and a portion of the purchase consideration is allocated to lease intangibles. We 

believe these issues should be addressed by the FASB in its proposed investment property standard. Under the 

business combination model, the deferred tax issue for “wrapper” transactions is easier to address. 


Regulatory issues 

Many reporting entities subject to the regulations of Sarbanes-Oxley Section 404 may have significant practical 

concerns about reporting the fair value of investment property, including the ability to rely on valuation experts or 

completing real estate valuations themselves. Significant issues include: 

• The need to create and/or enhance processes, controls, and systems 

• Best practices on valuation methodology and process may involve a significant amount of periodic external 

valuations 

• Considerations about when to adjust discount/cap rates or market rents 

• Property-specific information and data-flow for changes in events (e.g., such as tenant bankruptcy,, leasing activity, 

or changes in cost structure from increased utility, insurance, or tax costs) may not be captured in valuations in the 

required financial reporting timetable. 

Some of the affected companies are in regulated industries, such as banks and insurance companies. It is not yet clear 

how, when, or even if regulators will adjust risk-based capital requirements for investment property. Typically, 

regulators do not address such matters until a standard is closer to being issued in final form. Furthermore, some 

regulators apply statutory accounting, which may not adopt this model immediately -- or ever. 


Timetable for the proposed standard 

The exposure draft could be issued as early as September 2010, with an abbreviated comment letter period ending 

contemporaneously with that of the exposure draft on the Lease Project issued in August. If completed, it is expected 

that the new investment property standard will be adopted concurrently with the proposed new leasing standard, and 

that an exclusion from the lease standard will be made for lessors of investment properties accounted for at fair value 

in the United States, similar to the one already discussed by the IASB for those reporting at fair value under IAS 40. It 

is also expected that the adoption dates of the two standards will be aligned even if the finalized release of each 

standard is different. 

For many public REITs/REOCs, substantial new processes and controls will be needed in moving to an investment 

property standard. In most cases a system-based solution will be the answer. Today, many real estate accounting 

systems can transfer key data, such as rent rolls, into valuation software and frequently do so to prepare valuations for 

lenders. This may need to be further refined, and require additional processes to be developed to review and approve 

assumptions and output. Given that the potential adoption date of such a standard may be as early as 2013, it is not 

too early for real estate companies to start considering their systems, processes, and human capital needs as they 

consider long-term strategies. 

Lease project/investment property project timeline and path forward 

Phase I 

Exposure Draft 

(mid-2010) 

• Training/awareness 

• Preliminary assessment 

• Strategic planning for 

the future 

• Process and technology 

readiness 

US GAAP 

today… 

Assess impact and 

determine strategy 

Phase II 

Final standard 

• Issues resolution 

• Business strategy 

changes 

• Systems 

changes/upgrades 

• Execution 

(2011) 

• Planning for the future 


Phase III 

Project management, communication, knowledge transfer 

Effective date 

2013/2014 

• Go live and business as 

usual 

• Reporting updates 

• Ongoing monitoring 

US GAAP 

tomorrow 

Establish policies and 

prepare financial results Embed the new standard

Contact us 

If you would like to have a more in depth conversation or require services for any of the topics discussed in this 

publication, please contact any of the following PwC professionals: 

National real estate 

Tim Conlon 

US Real Estate Leader 

(New York) 

646.471.7700 

timothy.c.conlon@us.pwc.com 

Industry contacts 

Tom Wilkin 

National Office Real Estate 

Partner 

(Florham Park) 

973.236.4251 

tom.wilkin@us.pwc.com 


John Gottfried 

Technical Accounting Group 

Partner 

(New York) 

646.471.3317 

john.gottfried@us.pwc.com 

Banking Chip Currie frederick.currie@us.pwc.com 973.236.5331 

Insurance Jill Butler jill.butler@us.pwc.com 973.236.4678 

Utilities Tom McGuinness thomas.mcguinness@us.pwc.com 973.236.4034 

Retail Peter Schlicksup peter.j.schlicksup@us.pwc.com 973.236.5259

pwc.com 

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Fair value reporting for investment properties under US GAAP

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