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EQR » Topics » Accounting for Certain Financial Instruments with Characteristics of both Liabilities and EquityThis excerpt taken from the EQR 8-K filed May 24, 2006. Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity,
effective December 31, 2003. SFAS No. 150 and FSP No. FAS 150-3
require the Company to make certain disclosures regarding noncontrolling
interests that are classified as equity in the financial statements of a
subsidiary but would be classified as a liability in the parent’s financial
statements under SFAS No. 150 (e.g., minority interests in consolidated
limited-life subsidiaries). The Company is presently the controlling partner in
various consolidated partnerships consisting of 35 properties and 6,004 units
and various uncompleted development properties having a minority interest book
value of $17.0 million at December 31, 2005. Some of these partnerships
contain provisions that require the partnerships to be liquidated through the
sale of its assets upon reaching a date specified in each respective
partnership agreement. The Company, as controlling partner, has an obligation
to cause the property owning partnerships to distribute proceeds of liquidation
to the Minority Interests in these Partially Owned
F-18 Properties only to the extent that the net proceeds received by the partnerships from the sale of its assets warrant a distribution based on the partnership agreements. As of December 31, 2005, the Company estimates the value of Minority Interest distributions would have been approximately $73.4 million (“Settlement Value”) had the partnerships been liquidated. This Settlement Value is based on estimated third party consideration realized by the partnerships upon disposition of the Partially Owned Properties and is net of all other assets and liabilities, including yield maintenance on the mortgages encumbering the properties, that would have been due on December 31, 2005 had those mortgages been prepaid. Due to, among other things, the inherent uncertainty in the sale of real estate assets, the amount of any potential distribution to the Minority Interests in the Company’s Partially Owned Properties is subject to change. To the extent that the partnerships’ underlying assets are worth less than the underlying liabilities, the Company has no obligation to remit any consideration to the Minority Interests in Partially Owned Properties. In June 2005, the FASB ratified the consensus in EITF Issue No. 04-5, This excerpt taken from the EQR 10-Q filed May 8, 2006. Accounting
for Certain Financial Instruments with Characteristics of both Liabilities and
Equity, effective December 31, 2003. SFAS No. 150 and FSP No. FAS
150-3 require the Company to make certain disclosures regarding
noncontrolling interests that are classified as equity in the financial
statements of a subsidiary but would be classified as a liability in the parent’s
financial statements under SFAS No. 150 (e.g., minority interests in
consolidated limited-life subsidiaries). The Company is presently the
controlling partner in various consolidated partnerships consisting of 45
properties and 7,366 units and various uncompleted development properties
having a minority interest book value of $19.0 million at March 31, 2006. Some
of these partnerships contain provisions that require the partnerships to be
liquidated through the sale of its assets upon reaching a date specified in
each respective partnership agreement. The Company, as controlling partner, has
an obligation to cause the property owning partnerships to distribute proceeds
of liquidation to the Minority Interests in these Partially Owned Properties
only to the extent that the net proceeds received by the partnerships from the
sale of its assets warrant a distribution based on the partnership agreements. As
of March 31, 2006, the Company estimates the value of Minority Interest
distributions would have been approximately $87.1 million (“Settlement Value”)
had the partnerships been liquidated. This Settlement Value is based on
estimated third party consideration realized by the partnerships upon
disposition of the Partially Owned Properties and is net of all other assets
and liabilities, including yield maintenance on the mortgages encumbering the
properties, that would have been due on March 31, 2006 had those mortgages
been prepaid. Due to, among other things, the inherent uncertainty in the sale
of real estate assets, the amount of any potential distribution to the Minority
Interests in the Company’s Partially Owned Properties is subject to change. To
the extent that the partnerships’ underlying assets are worth less than the
underlying liabilities, the Company has no obligation to remit any
consideration to the Minority Interests in Partially Owned Properties.
In June 2005, the FASB ratified the consensus in EITF Issue No. 04-05, This excerpt taken from the EQR 10-K filed Mar 8, 2006. Accounting for Certain Financial Instruments with Characteristics of
both Liabilities and Equity, effective December 31, 2003. SFAS No. 150
and FSP No. FAS 150-3 require the Company to make certain disclosures
regarding noncontrolling interests that are classified as equity in the
financial statements of a subsidiary but would be classified as a liability in
the parent’s financial statements under SFAS No. 150 (e.g., minority
interests in consolidated limited-life subsidiaries). The Company is presently
the controlling partner in various consolidated partnerships consisting of 35
properties and 6,004 units and various uncompleted development properties
having a minority interest book value of $17.0 million at December 31,
2005. Some of these partnerships contain provisions that require the
partnerships to be liquidated through the sale of its assets upon reaching a
date specified in each respective partnership agreement. The Company, as
controlling partner, has an obligation to cause the property owning
partnerships to distribute proceeds of liquidation to the Minority Interests in
these Partially Owned Properties only to the extent that the net proceeds
received by the partnerships from the
F-19
sale of its assets warrant a distribution based on the partnership agreements. As of December 31, 2005, the Company estimates the value of Minority Interest distributions would have been approximately $73.4 million (“Settlement Value”) had the partnerships been liquidated. This Settlement Value is based on estimated third party consideration realized by the partnerships upon disposition of the Partially Owned Properties and is net of all other assets and liabilities, including yield maintenance on the mortgages encumbering the properties, that would have been due on December 31, 2005 had those mortgages been prepaid. Due to, among other things, the inherent uncertainty in the sale of real estate assets, the amount of any potential distribution to the Minority Interests in the Company’s Partially Owned Properties is subject to change. To the extent that the partnerships’ underlying assets are worth less than the underlying liabilities, the Company has no obligation to remit any consideration to the Minority Interests in Partially Owned Properties.
In June 2005, the FASB ratified the consensus in EITF Issue No. 04-5, This excerpt taken from the EQR 8-K filed Dec 2, 2005. Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity. SFAS No. 150 establishes standards for
classifying and measuring as liabilities certain financial instruments that
embody obligations of the issuer and have characteristics of both liabilities
and equity. On November 7, 2003,
the FASB issued FSP No. FAS 150-3, which deferred for an indefinite period
the classification and measurement provisions, but not the disclosure
provisions (see discussion below), of SFAS No. 150 as it relates to
noncontrolling interests that are classified as equity in the financial
statements of a subsidiary but would be classified as a liability in the parent’s
financial statements under SFAS No. 150 (e.g., minority interests in
consolidated limited-life subsidiaries).
The Company does not have any mandatorily redeemable preferred
shares/units that fall within the scope of SFAS No. 150.
With regards to the aforementioned disclosure provisions, the Company is presently the controlling partner in various consolidated partnerships consisting of 39 properties and 7,220 units having a minority interest book value of $9.6 million at December 31, 2004. These partnerships contain provisions that require the partnerships to be liquidated through the sale of its assets upon reaching a date specified in each respective partnership agreement. The Company, as controlling partner, has an obligation to cause the property owning partnerships to distribute proceeds of liquidation to the Minority Interests in these Partially Owned Properties only to the extent that the net proceeds received by the partnerships from the sale of its assets warrant a distribution based on the partnership agreements. As of December 31, 2004, the Company estimates the value of Minority Interest distributions would have been approximately $111.3 million (“Settlement Value”) had the partnerships been liquidated. This Settlement Value is based on estimated third party consideration realized by the partnerships upon disposition of the Partially Owned Properties and is net of all other assets and liabilities, including yield maintenance on the mortgages encumbering the properties, that would have been due on December 31, 2004 had those
F-18
mortgages been prepaid. Due to, among other things, the inherent uncertainty in the sale of real estate assets, the amount of any potential distribution to the Minority Interests in the Company’s Partially Owned Properties is subject to change. To the extent that the partnerships’ underlying assets are worth less than the underlying liabilities, the Company has no obligation to remit any consideration to the Minority Interests in Partially Owned Properties.
On July 31, 2003, the SEC clarified its position with respect to Emerging Issues Task Force (“EITF”) Topic D-42, This excerpt taken from the EQR 10-Q filed Nov 7, 2005. Accounting for Certain Financial Instruments with Characteristics of
both Liabilities and Equity, effective December 31, 2003. SFAS No. 150 and FSP No. FAS 150-3
require the Company to make certain disclosures regarding noncontrolling
interests that are classified as equity in the financial statements of a
subsidiary but would be classified as a liability in the parent’s financial
statements under SFAS No. 150 (e.g., minority interests in consolidated
limited-life subsidiaries). The Company
is presently the controlling partner in various consolidated partnerships
consisting of 36 properties and 6,134 units and various uncompleted development
properties having a minority interest book value of $10.7 million at September 30,
2005. Some of these partnerships contain
provisions that require the partnerships to be liquidated through the sale of
its assets upon reaching a date specified in each respective partnership
agreement. The Company, as controlling
partner, has an obligation to cause the property owning partnerships to
distribute proceeds of liquidation to the Minority Interests in these Partially
Owned Properties only to the extent that the net proceeds received by the
partnerships from the sale of its assets warrant a distribution based on the
partnership agreements. As of September 30,
2005, the Company estimates the value of Minority Interest distributions would
have been approximately $75.9 million (“Settlement Value”) had the partnerships
been liquidated. This Settlement Value
is based on estimated third party consideration realized by the partnerships
upon disposition of the Partially Owned Properties and is net of all other
assets and liabilities, including yield maintenance on the mortgages
encumbering the properties, that would have been due on September 30, 2005
had those mortgages been prepaid. Due
to, among other things, the inherent uncertainty in the sale of real estate
assets, the amount of any potential distribution to the Minority Interests in
the Company’s Partially Owned Properties is subject to change. To the extent that the partnerships’
underlying assets are worth less than the underlying liabilities, the Company
has no obligation to remit any consideration to the Minority Interests in
Partially Owned Properties.
In June 2005, the FASB ratified the consensus in EITF Issue No. 04-5, This excerpt taken from the EQR 8-K filed Aug 22, 2005. Accounting for Certain Financial Instruments
with Characteristics of both Liabilities and Equity. SFAS No. 150 establishes standards for
classifying and measuring as liabilities certain financial instruments that
embody obligations of the issuer and have characteristics of both liabilities
and equity. On November 7, 2003, the
FASB issued FSP No. FAS 150-3, which deferred for an indefinite period the
classification and measurement provisions, but not the disclosure provisions
(see discussion below), of SFAS No. 150 as it relates to noncontrolling
interests that are classified as equity in the financial statements of a
subsidiary but would be classified as a liability in the parent’s financial
statements under SFAS No. 150 (e.g., minority interests in consolidated
limited-life subsidiaries). The Company
does not have any mandatorily redeemable preferred shares/units that fall
within the scope of SFAS No. 150.
With regards to the aforementioned disclosure provisions, the Company is presently the controlling partner in various consolidated partnerships consisting of 39 properties and 7,220 units having a minority interest book value of $9.6 million at December 31, 2004. These partnerships contain provisions that require the partnerships to be liquidated through the sale of its assets upon reaching a date specified in each respective partnership agreement. The Company, as controlling partner, has an obligation to cause the property owning partnerships to distribute proceeds of liquidation to the Minority Interests in these Partially Owned Properties only to the extent that the net proceeds received by the partnerships from the sale of its assets warrant a distribution based on the partnership agreements. As of December 31, 2004, the Company estimates the value of Minority Interest distributions would have been approximately $111.3 million (“Settlement Value”) had the partnerships been liquidated. This Settlement Value is based on estimated third party consideration realized by the partnerships upon disposition of the Partially Owned Properties and is net of all other assets and liabilities, including yield maintenance on the mortgages encumbering the properties, that would have been due on December 31, 2004 had those
F-18
mortgages been prepaid. Due to, among other things, the inherent uncertainty in the sale of real estate assets, the amount of any potential distribution to the Minority Interests in the Company’s Partially Owned Properties is subject to change. To the extent that the partnerships’ underlying assets are worth less than the underlying liabilities, the Company has no obligation to remit any consideration to the Minority Interests in Partially Owned Properties.
On July 31, 2003, the SEC clarified its position with respect to Emerging Issues Task Force (“EITF”) Topic D-42, This excerpt taken from the EQR 10-Q filed Aug 8, 2005. Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity,
effective December 31, 2003. SFAS No. 150
and FSP No. FAS 150-3 require the Company to make certain disclosures
regarding noncontrolling interests that are classified as equity in the
financial statements of a subsidiary but would be classified as a liability in
the parent’s financial statements under SFAS No. 150 (e.g., minority
interests in consolidated limited-life subsidiaries). The Company is presently the controlling partner
in various consolidated partnerships consisting of 39 properties and 6,805
units having a minority interest book value of $7.2 million at June 30,
2005. Some of these partnerships contain
provisions that require the partnerships to be liquidated through the sale of
its assets upon reaching a date specified in each respective partnership
agreement. The Company, as controlling
partner, has an obligation to cause the property owning partnerships to
distribute proceeds of liquidation to the Minority Interests in these Partially
Owned Properties only to the extent that the net proceeds received by the
partnerships from the sale of its assets warrant a distribution based on the
partnership agreements. As of June 30,
2005, the Company estimates the value of Minority Interest distributions would
have been approximately $70.2 million (“Settlement Value”) had the partnerships
been liquidated. This Settlement Value
is based on estimated third party consideration realized by the partnerships
upon disposition of the Partially Owned Properties and is net of all other
assets and liabilities, including yield maintenance on the mortgages
encumbering the properties, that would have been due on June 30, 2005 had
those mortgages been prepaid. Due to,
among other things, the inherent uncertainty in the sale of real estate assets,
the amount of any potential distribution to the Minority Interests in the
Company’s Partially Owned Properties is subject to change. To the extent that the partnerships’
underlying assets are worth less than the underlying liabilities, the Company
has no obligation to remit any consideration to the Minority Interests in
Partially Owned Properties.
In June 2005, the FASB ratified the consensus in EITF Issue No. 04-5, This excerpt taken from the EQR 10-Q filed May 9, 2005. Accounting for Certain Financial Instruments with Characteristics of
both Liabilities and Equity.
SFAS No. 150 establishes standards for classifying and measuring as
liabilities certain financial instruments that embody obligations of the issuer
and have characteristics of both liabilities and equity. On November 7, 2003, the FASB issued FSP No.
FAS 150-3, which deferred for an indefinite period the classification and
measurement provisions, but not the disclosure provisions (see discussion below),
of SFAS No. 150 as it relates to noncontrolling interests that are classified
as equity in the financial statements of a subsidiary but would be classified
as a liability in the parent’s financial statements under SFAS No. 150 (e.g.,
minority interests in consolidated limited-life subsidiaries). The Company does not have any mandatorily
redeemable preferred shares/units that fall within the scope of SFAS No. 150.
With regards to the aforementioned disclosure provisions, the Company is presently the controlling partner in various consolidated partnerships consisting of 39 properties and 6,929 units having a minority interest book value of $12.5 million at March 31, 2005. Some of these partnerships contain provisions that require the partnerships to be liquidated through the sale of its assets upon reaching a date specified in each respective partnership agreement. The Company, as controlling partner, has an obligation to cause the property owning partnerships to distribute proceeds of liquidation to the Minority Interests in these Partially Owned Properties only to the extent that the net proceeds received by the partnerships from the sale of its assets warrant a distribution based on the partnership agreements. As of March 31, 2005, the Company estimates the value of Minority Interest distributions would have been approximately $69.1 million (“Settlement Value”) had the partnerships been liquidated. This Settlement Value is based on estimated third party consideration realized by the partnerships upon disposition of the Partially Owned Properties and is net of all other assets and liabilities, including yield maintenance on the mortgages encumbering the properties, that would have been due on March 31, 2005 had those mortgages been prepaid. Due to, among other things, the inherent uncertainty in the sale of real estate assets, the amount of any potential distribution to the Minority Interests in the Company’s Partially Owned Properties is subject to change. To the extent that the partnerships’ underlying assets are worth less than the underlying liabilities, the Company has no obligation to remit any consideration to the Minority Interests in Partially Owned Properties.
This excerpt taken from the EQR 10-K filed Mar 14, 2005. Accounting for Certain Financial Instruments
with Characteristics of both Liabilities and Equity. SFAS No. 150 establishes standards for
classifying and measuring as liabilities certain financial instruments that
embody obligations of the issuer and have characteristics of both liabilities
and equity. On November 7, 2003, the
FASB issued FSP No. FAS 150-3, which deferred for an indefinite period the
classification and measurement provisions, but not the disclosure provisions
(see discussion below), of SFAS No. 150 as it relates to noncontrolling
interests that are classified as equity in the financial statements of a
subsidiary but would be classified as a liability in the parent’s financial
statements under SFAS No. 150 (e.g., minority interests in consolidated limited-life
subsidiaries). The Company does not have
any mandatorily redeemable preferred shares/units that fall within the scope of
SFAS No. 150.
With regards to the aforementioned disclosure provisions, the Company is presently the controlling partner in various consolidated partnerships consisting of 39 properties and 7,220 units having a minority interest book value of $9.6 million at December 31, 2004. These partnerships contain provisions that require the partnerships to be liquidated through the sale of its assets upon reaching a date specified in each respective partnership agreement. The Company, as controlling partner, has an obligation to cause the property owning partnerships to distribute proceeds of liquidation to the Minority Interests in these Partially Owned Properties only to the extent that the net proceeds received by the partnerships from the sale of its assets warrant a distribution based on the partnership agreements. As of December 31, 2004, the Company estimates the value of Minority Interest distributions would have been approximately $111.3 million (“Settlement Value”) had the partnerships been liquidated. This Settlement Value is based on estimated third party consideration realized by the partnerships upon disposition of the Partially Owned Properties and is net of all other assets and liabilities, including yield maintenance on the mortgages encumbering the properties, that would have been due on December 31, 2004 had those mortgages been prepaid. Due to, among other things, the inherent uncertainty in the sale of real estate assets, the amount of any potential distribution to the Minority Interests in the Company’s
F-19
Partially Owned Properties is subject to change. To the extent that the partnerships’ underlying assets are worth less than the underlying liabilities, the Company has no obligation to remit any consideration to the Minority Interests in Partially Owned Properties.
On July 31, 2003, the SEC clarified its position with respect to Emerging Issues Task Force (“EITF”) Topic D-42, | EXCERPTS ON THIS PAGE:
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