Starwood Real Estate Income Trust, Inc. Notes to Consolidated Financial Statements
Operations and Comprehensive Loss. As of December 31, 2024 and 2023, the Company recorded a net deferred tax liability of $35.5 million and $30.7 million, respectively, primarily due to assumed capital gains from three European investments, within Other liabilities on the Company’s Consolidated Balance Sheets. As of December 31, 2024, net operating loss (“NOL”) carryforwards for federal, state and foreign income tax purposes totaled $93.2 million, and are primarily driven by dispositions of residential rental units within one of the Company’s TRSs and valuation adjustments in certain foreign jurisdictions. Although the federal NOL carryforwards do not expire, the Company has recorded full valuation allowances against certain deferred tax assets for which the Company believes it is more likely than not that the Company will not realize a benefit from these in future taxable years. Net Loss per Share Basic net loss per share is computed by dividing net loss attributable to stockholders for the period by the weighted average number of common shares outstanding during the period. All classes of common stock are allocated net loss at the same rate per share and receive the same gross distribution per share. Diluted loss per share is computed by dividing net loss attributable to stockholders for the period by the weighted average number of common shares and common share equivalents outstanding (unless their effect is antidilutive) for the period. There are no common share equivalents outstanding that would have a dilutive effect as a result of the net loss, and accordingly, the weighted average number of common shares outstanding is identical for both basic and diluted shares for the years ended December 31, 2024, 2023 and 2022. The restricted stock grants of Class I shares held by the Company’s independent directors are not considered to be participating securities because they do not contain non-forfeitable rights to distributions. As a result, there is no impact of these restricted stock grants on basic and diluted net loss per common share until the restricted stock grants have fully vested. Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-07, “ Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). The amendments are intended to increase reportable segment disclosure requirements primarily through enhanced disclosures of significant segment expenses that are readily provided to the chief operating decision maker (“CODM”) and included in segment profit or loss and disclosure of the title and position of the CODM and how the CODM uses the reported segment measures in assessing segment performance and deciding how to allocate resources. ASU 2023-07 is effective on a retrospective basis for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07 retrospectively as of January 1, 2024. Refer to Note 15 — “Segment Reporting” for the impact of the adoption of this standard. The adoption of ASU 2023-07 did not have a material impact on the consolidated financial statements. In November 2024, the FASB issued Accounting Standards Update No. 2024-03, “ Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ” (“ASU 2024- 03”), which requires disclosure of certain costs and expenses on an interim and annual basis in the notes to the consolidated financial statements. The guidance is effective for annual reporting periods beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The guidance is to be applied either (1) prospectively to financial statements issued for reporting periods after the effective date or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the potential impact of adopting this standard on the consolidated financial statements and related disclosures.
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