at cost less depreciation, and real estate private equity funds, which generally report as ICs and therefore record their investments on a net basis at fair value. IPEs generally raise capital from (typically passive) investors; invest in real property for total return, including capital appreciation; and do not have significant investments other than real estate. Similar to ICs, IPEs will report their investments at fair value, with changes in fair value recognized in earnings. IPEs would be exempt from the recently proposed lease accounting guidance and would instead recognize rental revenue as payments are received. Lastly, IPEs would not have to recognize intangible assets related to in-place leases upon property acquisition. One other proposed guidance nuance is that the FASB has classified the IPE distinction preemptively to the IC determination. So, an entity that would otherwise qualify under both paradigms will report as an IPE, not an IC.
Next Steps The proposed IC and IPE guidance could have significant impacts on entities in the investment management industry, REITs and other entities that may fall within the revised guidance. Practitioners should carefully consider all entities for potential application of IC or IPE accounting.
Recognizing the significant need for long‐term care planning among our members, the New Jersey Society of Certified Public Accountants is pleased to announce a comprehensive new Long Term Care Insurance Program. This program offers a portfolio of comprehensive plans from multiple highly rated insurance carriers.
Through a partnership with Askin, Weber and Reed and Long‐Term Care Resources, New Jersey Society of Certified Public Accountants members now have a national network of long‐term care specialists available to explain the costs and benefits of this vital program.
More importantly, we have used the buying power of our association to obtain special discounted rates.
Anthony F. Marone Jr., CPA, is the vice president and controller of Capital Trust, Inc. He is a member of the New Jersey Society of CPAs Student Programs & Scholarships Committee and New Jersey CPA magazine Editorial Advisory Board. Contact him at tmarone@ capitaltrust.com.
While we know this program is very valuable, insurance is not the right answer for everyone. However, information is your best weapon in the fight against the high cost of long‐term care and to determine if Long Term Care Insurance is right for you. Advanced planning is always the best approach. To request more information, call today 800‐616‐8759. Connect with us at: www.awrins.com
NEW JERSEY CPA • JANUARY • FEBRUARY 2012
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