Company: KBSR
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001482430-25-000021
Chunk: 48

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-03-14
Form: 10-K
Item: Item 15
Chunk 48
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ICIES (CONTINUED)

ASC 610-20 refers to the revenue recognition principles under ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606).  Under ASC 610-20, if the Company determines it does not have a controlling financial interest in the entity that holds the asset and the arrangement meets the criteria to be accounted for as a contract, the Company would derecognize the asset and recognize a gain or loss on the sale of the real estate when control of the underlying asset transfers to the buyer.  Real Estate Equity SecuritiesDividend income from real estate equity securities is recognized on an accrual basis based on eligible units as of the ex-dividend date.Cash and Cash EquivalentsThe Company recognizes interest income on its cash and cash equivalents as it is earned and classifies such amounts as other interest income.  Real EstateDepreciation and AmortizationReal estate costs related to the acquisition and improvement of properties are capitalized and depreciated over the expected useful life of the asset on a straight-line basis.  Repair and maintenance costs are charged to expense as incurred and significant replacements and betterments are capitalized.  Repair and maintenance costs include all costs that do not extend the useful life of the real estate asset.  The Company considers the period of future benefit of an asset to determine its appropriate useful life.  Expenditures for tenant improvements are capitalized and amortized over the shorter of the tenant’s lease term or expected useful life.  The Company anticipates the estimated useful lives of its assets by class to be generally as follows:  LandN/ABuildings25-40 yearsBuilding improvements10-25 yearsTenant improvementsShorter of lease term or expected useful lifeTenant origination and absorption costsRemaining term of related leases, including below-market renewal periodsImpairment of Real Estate and Related Intangible Assets and LiabilitiesThe Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate and related intangible assets and liabilities may not be recoverable or realized.  When indicators of potential impairment suggest that the carrying value of real estate and related intangible assets and liabilities may not be recoverable, the Company assesses the recoverability by estimating whether the Company will recover the carrying value of the real estate and related intangible assets and liabilities through its undiscounted future cash flows and its eventual disposition.  If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of the real estate and