The SOP establishes the borrower's accounting for a participating mortgage loan if the lender participates in increases in the market value of the mortgaged real estate project, the results of operations of the mortgaged real estate project, or both. The SOP is effective for financial statements issued for fiscal years beginning after June 30, 1997.
Earlier application is encouraged.
The effect of initially applying the SOP should be reported as a cumulative effect of a change in accounting principle.