A — May 11 - 24, 2012 — Mid Atlantic Real Estate Journal MAREJ A dvertisers D irectory A&S Boiler & Burner.................................................................21C Accent Group..............................................................................22C AEGIS Energy Services. ..............................................................5C AKF...............................................................................................5B American Boiler Co.. ....................................................................7C Apartment Guide........................................................................13C B.R. 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BC-C Jenkintown Building Services, Inc............................................ 11B Jewel Electric Suppy Co............................................................. 11C Kaplin Stewart. ...................................................................... 2A,9B Keast & Hood Co........................................................................ 11B LandmarkJCM. .......................................................................... 21A Lebanon Valley.............................................................................1B LEW Corp.. .................................................................................21C M. 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Construction Corp....................................................12C Patterson Woods......................................................................... 21A Penn’s Northeast..........................................................................2B PennCap Properties. .............................................................. IBC-B Pennrose.....................................................................................IC-A Poskanzer Skott Architects........................................................ 32A Regal Bank..................................................................................17C Riker Danzig...................................................................24A, IBC-A SEBCO Laundry......................................................................... 24A Sheldon Gross Realty, Inc.......................................................... 24A Sign A Rama. ..............................................................................19C Target Building Construction....................................................14B Tenant Safe.................................................................................19C The Kislak Company, Inc........................................................... 26A The Thesing Companies............................................................... 5A Tighe & Cottrell, P.A.................................................................. 21A Transportation Resource Group, Inc...........................................2B TriState Realtors Commercial Alliance..................................... 37A Whitesell....................................................................................... 4A Whitestone Associates Inc............................................................2B Withim Smith + Brown, PC.......................................................18C Wolf Commercial Real Estate.................................................... 27A WP Realty..................................................................................IC-B
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Mid Atlantic Real Estate Journal
Mid Atlantic R eal E state J ournal Publisher ............................................................................Linda Christman Co-Publisher .........................................................................Joe Christman Section Publisher ..............................................................Michael Campisi Section Publisher ................................................................Elaine Fanning Senior Editor/Graphic Artist ................................................ Karen Vachon Production Assistant ......................................................... Rachel Rugman Office Manager ....................................................................Joanne Gavaza Editorial Consultant .............................................................. Ben Summers Guest Columnist .............................................. Joyce Price & Karyn Tasker Mid Atlantic R eal E state J ournal ~ Published Semi-Monthly P.O. Box 26 Accord, MA 02018 (Mail) 312 Market Street, Rockland, MA 02370 (Overnight) Periodicals postage paid at Rockland, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal, P.O. Box 26, Accord, MA 02018 USPS #22-358 | Vol. 24 Issue 9 Subscription rates: $99 - one year, $198 - two years, $4 - single copy REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Toll-Free: (800) 584-1062 | MA: (781) 871-5298 | Fax: (781) 871-5299 www.marejournal.com The views expressed by contributing columnists are not necessarily representative of the Mid Atlantic Real Estate Journal
By Joyce Price & Karyn Tasker
n 2006, the Financial Accounting Standards Board issued Statement No. 157, Fair Value Mea- surements which was sub- sequently codified under Accounting Standards Codifi- cation Section 820 (ASC 820). ASC 820 provides guidelines surrounding fair value mea- surement and its application. While companies may elect fair value accounting for fi- nancial assets, current U.S. accounting standards only permit fair value reporting for non-financial assets in certain instances such as real estate investments held by pension funds or invest- ment companies. In these situations, the value of the real estate is adjusted to fair value on a recurring basis at each reporting date. ASC 820 also applies to the fair value reporting of nonfinancial as- sets on a nonrecurring basis, such as the purchase of an operating property or the impairment of a real estate project. I What Investors Need to Know About Fair Value Accounting for Real Estate
The statement was cre- ated to provide more relevant statements to investors, and is based on the idea that re- porting assets at fair value is moremeaningful than report- ing based on historical cost. ASC 820 requires additional disclosures related to how the value was determined. How- ever, this information can be confusing to many investors who are reading financial statements. Understanding the disclosures can eliminate the confusion and provide important information to the investor. How ASC 820 Is Interpreted: The Fair Value Hierarchy
ASC 820 defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction be- tween market participants at the measurement date.” The inputs utilized to estimate fair value are based on one of three levels (the fair value hierarchy). The reporting en- tity is required to disclose the level of input utilized which provides information as to how much of the reported fair value includes subjective components. Level One inputs are quot- ed prices in active markets for identical assets. For continued on page 12A
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