Real Estate Investment Trusts Essays - Real Estate,

Real Estate Investment Trusts Derrick Robicheaux Auditing 11:00-11:50 Accounting for REITs A real estate investment trust, or REIT, is a company that buys, develops, manages and sells real estate assets. There are three types of REITs; they are equity REITs, mortgage REITs, and hybrid REITs. An equity REIT is a corporation that purchases, owns and manages real estate properties; it does not own or originate real estate loans. It may also develop properties. A mortgage REIT is a corporation that purchases, owns and manages real estate loans; it does not own real estate properties. It may or may not originate commercial and/or residential loans. A hybrid REIT is a corporation that purchases, owns and manages both real estate loans and real estate properties. It has the qualities of both an equity and mortgage REIT which is why it is referred to as a hybrid. One of the most distinguishing characteristics of a REIT is that they are required to distribute at least 95% of taxable income to shareholders. REITs allow participants to invest in a professionally-managed portfolio of real estate assets. This is important because prior to Congress's creation of REITs only extremely rich individuals were able to benefit from ventures in the real estate market. By pooling assets together in a manner similar to that of a mutual fund, REITs allow the everyday investor the chance to invest in real estate properties. The main benefit of a REIT is that it is exempt from double taxation. The normal corporation is taxed on earnings, and then when dividends are paid, the individual receiving the dividend is taxed. REITs can deduct dividends distributed from taxable income. This results in only one level of taxation. The main disadvantage of a REIT is that since nearly all earnings are distributed as dividends, the trust must find capital to reinvest into the business from other areas. These funds are usually raised by investments in the market, and through the capital gains realized from the sale of the REITs assets. The second method by which REITs procure capital to reinvest into the business raises an accounting issue regarding the classification of assets. Currently, the buildings and property that REITs utilize to raise income are classified as property, plant, and equipment. However, it can be argued that these assets should be classified as inventory. The accounting definition of property, plant, and equipment specifies those properties of a durable nature used in the regular operations of the business. These assets consist of physical property such as land, buildings, machinery, furniture, tools and wasting resources. With the exception of land, most assets are either depreciable (such as buildings) or consumable (such as timberlands). These properties do reasonably fall into this category, especially in the cases where the REIT is involved in managing the property and receives revenue from rents. The definition for inventory relates to asset items held for sale in the ordinary course of business or goods that will be used or consumed in the production of goods to be sold. It can also be reasonably justified that these assets fall into this category, this is the nature of REITs, to buy and sell real estate. This is a gray area in which reasonable people can disagree. It is my opinion that these assets should be classified according the company's honest intent for its use. Many REITs own and operate apartment complexes and have no intent to sell the property, but are content to manage the units and collect rent. In these types of cases the property is not being sold but leased. Therefore, PP&E would be the appropriate classification, similar to the method that car rental agencies use. But, if the company intends to improve and sell the property then the property should be inventory. This method would be similar to method by which securities investments are accounted for. Depending on the company's intent, securities can be classified as held-to-maturity, available fo r sale, or marketable securities. Since all these properties are currently classified as property, plant, and equipment, the issue of depreciation becomes important. If these properties were classified as inventory, then all maintenance and repairs would expensed as incurred, and no depreciation would be recognized. However, as property, plant, and equipment, maintenance and

Student Sample Literary Analysis Essay

Student Sample Literary Analysis EssayIn recent years, more students are finding themselves performing literary analysis of a student sample literary analysis essay. These tests are not about knowing the author's life or work, but are a method for a teacher to assess the student's ability to understand the works of literature. While the purpose of this type of test is not always in the student's best interest, they can be quite beneficial for understanding an author or if a student is having trouble with reading or writing their work. It is important to understand how this type of essay should be formatted to fit in the most comfortable manner possible and the format used is different from other forms of writing tests.The sample literary analysis essay should be written in a coherent manner. It is best to be as concise as possible when assessing a student's ability to read and write their work. When a student writes, they should strive to keep their reader engaged while attempting to convey the author's thoughts. Although there is an element of working outside of their topic, it is always important to stick within the framework of their story.There are two options for the essay. There is the student sample literary analysis essay that is a compilation of paragraphs and there is the regular essay where each paragraph is treated as a separate essay. The student literary analysis essay should be as brief as possible, and once it gets to the end should highlight the entire essay. It is best to have the essay conclude with a statement of some sort such as 'In conclusion, I believe that...'One of the best ways to practice for writing the sample literary analysis essay is to write a few drafts before submitting them to the teacher. Before submitting a student literary analysis essay to the instructor, it is important to rewrite it as many times as possible and at least five times. This allows the student to become comfortable with the structure and style of the essay. Also, it allows the student to become familiar with the structure of a literary analysis.Since the sample literary analysis essay will be submitted to the teacher, it is important to use only formal writing and grammar. It is also helpful to use only formal style of sentences. However, it is important to take into consideration the style of the essay and should be consistent. There is nothing worse than writing a piece and realizing a writer used one form of grammar and sentence structure.Students should be able to apply all of the information they learned from the sample literary analysis essay throughout the work they are doing. A well-written essay with proper formatting will help them in making sure they understand the study material, which will allow them to learn better as they go along. There are two main types of essays; the introduction and the conclusion.The introduction should be written as a brief introduction to the material being studied and then should be followed by the conclusion. The introduction is very important since it sets the tone for the entire paper. The conclusion will give the student the reasons for why they chose the topic and what they hope to achieve from their essay.Once the student sample literary analysis essay is written, it is important to edit it for grammar and spelling. The student should also make sure that they know the purpose of the essay and what it is trying to accomplish. They should also make sure that they understand the strengths and weaknesses of the essay and then have a discussion with the instructor on these things. By following these tips, it is possible to write a quality student literary analysis essay.