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Auditing Real panies
OVERVIEW OF THE INDUSTRY   
(a) Organizational Forms,   
(i) Limited Partnerships,   
(ii) Limited panies,   
(iii) Partnership Agreements,   
(b) Real Estate Investment Trusts,   
(c) Regulatory Framework,   
ACCOUNTING PRINCIPLES AND PRACTICES   
(a) Equity Investments,   
(b) Real Estate Properties and Deferred Costs,   
(c) Impairment and Valuation of Real Estate Assets,   
(d) Leasing, Sale, and Operational Period,   
(e) Profit Recognition on Sales of Real Estate,   
(f) Accounting by Participating Mortgage Loan Borrowers,   
(g) Extinguishment of Debt,   
(h) Operating Rental Revenues,   
AUDIT STRATEGY   
SUBSTANTIVE TESTS   
(a) Developer's Receivables,   
(b) Property Acquisition and Development Costs,   
(c) Real Estate Sales,   
(d) Operating Rental Revenues,   
(e) Depreciation Expense,   
OVERVIEW OF THE INDUSTRY
The boundaries of the real estate industry are difficult to define because many entities that engage in real estate transactions also derive substantial revenues from other sources. For the purposes of this chapter, a real pany is one that derives its principal revenues from activities involving the control, ownership, or sale of land and buildings. This definition panies that engage in:
Owning undeveloped land for wholesale or retail sale
 
Land development
 
Improving and selling real property as a primary product (., a home builder)
 
Acquiring and improving property to be held as an investment for the production of current e and for future appreciation
panies are involved in more than one of those activities and, in addition, derive revenues from a variety of ancillary services associated with real estate, such as financing, property management, insurance, subcontracting, and brokerage. In addition, a number of other types of businesses, such as brokerage, leasing, management, and financing, are closely associated with real estate ownersh