NEW ACCOUNTING FOR PROPERTY AND EQUIPMENT.

NEW ACCOUNTING FOR PROPERTY AND EQUIPMENT

Now is the time CPAs to speak on two proposed statements that affect the accounting for real estate projects. FASB has issued an exposure draft which proposes to amend it's Statement No. 67, Accounting for Costs and Initial Rental Operations of Real Estate Projects, to exclude the cost of developing rental properties from the scope of Statement No. 67.

The accounting for those costs would be subject to the guidance in a proposed Statement of Position being issued simultaneously by the AICPA. The AICPA's proposed SOP addresses accounting and disclosure issues related to a broader range of activities involving plant, property and equipment and would affect how certain of those costs are capitalized or expensed.

FASB's proposal would also amend APB Opinion No. 28, Interim Financial Reporting, to require that costs expensed as incurred per the SOP on an annual basis, also be expensed as incurred in interim periods.

Practitioners who will be affected by these proposed statements should register their comments with FASB and AICPA by Oct. 15.

More information and copies of the exposure draft and SOP are available for download on FASB's Web site at www.fasb.org.

If you have questions about this or any other accounting or auditing issue call CalCPA's Accounting & Auditing Answerline at [phone] ext. 2355.