What it is
For an entity that owns and leases property, the audit follows the rent roll to the ledger, the capitalized costs to invoices and the property values to impairment indicators. Debt covenants, related-party managers and partnership structures add consolidation and disclosure questions.
The checklist works through lessor revenue under ASC 842, property acquisitions and development, impairment and held for sale, equity method and partners’ capital, and disclosure.
When to use it
- Planning an audit of a property owner, developer or real estate partnership.
- When lenders or investors require audited statements.
- To document purchase price allocation and capitalization tests.
What’s inside
- Entity structure, VIE analysis and covenant review
- Rent roll tests, straight-line rent, collectibility and recoveries
- Asset acquisition versus business combination, capitalization and interest
- Impairment, held for sale and gain on sale
- Debt, derivatives, equity method and disclosure
Standard cited
This template follows AU-C 330 / ASC 842 / ASC 360. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use. See AU-C 330 explained.
Questions
Is a property purchase a business combination?
Use the screen in ASC 805: if substantially all the fair value is in a single identifiable asset or group of similar assets, it is an asset acquisition and transaction costs are capitalized.
What happens when collection of lease payments is not probable?
For an operating lease the lessor limits lease income to the lesser of straight-line income and the payments collected, and a later change in the collectibility assessment is recorded as a current-period adjustment to lease income (ASC 842-30-25-12 and 25-13). The assessment is made lease by lease.
When must costs stop being capitalized on a development?
When the property is substantially complete and ready for its intended use, subsequent costs such as ongoing operating costs are expensed (ASC 970-360).
Related templates
- Fixed Asset Additions Testing Workpaper
- Disclosure Checklist: Leases (ASC 842) and Revenue (ASC 606), Short Form
- Related Party Questionnaire for Management (AU-C 550 / ASC 850)
Last updated 11/05/2026. All free templates.