Real Estate Investment Trusts (REITs)

Over the past 50 years, REITS have grown in popularity they have also grown in complexity and use more complicated hedging instruments to manage market risks. It has become more important than ever for REITs to have access to transparent valuations that meet financial accounting standards and provide shareholders with meaningful information. DerivActiv can assist REITs with valuation and hedge accounting needs.

Real estate investment trusts or REITs create an opportunity for investors to participate in the commercial real estate market similar to the way mutual funds allow investors to participate in the stock market. A REIT is a corporate entity that owns and operates real estate and distributes its income to its investors. The REIT is structured so that the entity doesn’t owe any corporate taxes because it distributes so much of its taxable income to investors in the form of dividends. Similar to other corporations, REITs can be publicly or privately held, listed on stock exchanges, and they are classified as equity, mortgage, or hybrid. Real Estate Investment Trusts are exposed to several risks such as varying market demand from office and retail space, as well as tenant credit risk.

DerivActiv professionals provide independent financial product valuations for REITs. Call (866) 200-9012 for more information.

DerivActiv Provides Daily Mid-market Values and Monthly or Quarterly ASC 820 Adjusted Values for REITs 

Most REITs are subject to ASC 820 (FAS 157) reporting requirements, including having to provide fair value measurements and disclosures on the inputs and valuation techniques used to measure fair value in financial statements. DerivActiv helps REITs assess whether assets or liabilities are categorized as Level 1, Level 2, or Level 3 in the fair value hierarchy and then provides the necessary valuation methods and disclosure information to comply with ASC 820 accounting standards.

A SAS 70 Type II Audit Guarantees the Security of Our Clients’ Financial Information

DerivActiv has received a SAS 70 Type II audit by an independent CPA on an annual basis since 2009.  The SAS 70 Type II audit provides credible evidence that DerivActiv has adequate controls and safeguards over the financial information of our clients that is hosted on our website.

For more information on ASC 820 compliance services, call DerivActiv at (866) 200-9012.