Company: LANDO
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001495240-25-000005
Chunk: 148

Company: GLADSTONE LAND Corp
Filing Date: 2025-02-19
Form: 10-K
Item: Item 8
Chunk 148
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 a controlling financial interest.  We evaluate all significant investments in real estate-related assets to determine if they are VIEs, utilizing judgment and estimates that are inherently subjective.If an entity is determined to be a VIE, we then determine whether to consolidate the entity as the primary beneficiary.  The primary beneficiary has both (i) the power to direct the activities that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the entity.See Note 3, “Real Estate and Lease Intangibles—Investments in Unconsolidated Entities,” for further discussion.Investments in Water Assets

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From time to time, we have entered into contracts to acquire additional water assets for certain of our farms (see Note 3, “Real Estate and Lease Intangibles—Investments in Water Assets”).  The water assets acquired may be in the form of either water banked at a government municipality or groundwater pumping credits obtained through groundwater recharge programs established by government municipalities, which recharge is achieved via groundwater recharge facilities we have constructed on certain of our farms.  The contracts we have entered into to acquire additional water assets cannot readily be net settled by means outside of the respective contracts; therefore, in accordance with ASC 360, we recognize the investments in long-term water assets at cost, including all costs necessary to procure and transfer the water asset to its intended location.  Costs to acquire water assets are initially deferred in a prepaid account until such time that the water assets are recognized by the respective water district, at which time, the costs related to the recognized water assets are reclassed and capitalized as an investment in long-term water assets.  Investments in long-term water assets and the related prepaid asset are both included in Other assets, net on our accompanying Consolidated Balance Sheets.  While we may, in the future, sell portions of these water assets to unrelated third parties for a profit, our current intent is to hold these water assets for the long-term for future use on our farms.  There is no amount of time by which we must use these water assets.Each quarter, we will review our investments in long-term water assets for any indicators of impairment in accordance with ASC 360 and perform an impairment analysis if there are any such indicators.  In determining if impairment exists, we consider such indicators which may include, but are not limited to, deteriorating market conditions and environmental or regulatory changes.