Accounting of Real Estate Development and Sales Results

Revenue, costs and expenses arising from real estate development activities are recognized throughout the construction period in line with the financial progress of the works (Percentage of Completion method, or PoC), which measuring the actual cost of the undertaking against the total budgeted cost. As a result, a substantial part of the revenue in a given period reflects sales contracted previously.

Inventory at Market Value

Financial value of the units launched in inventory, at market price.

Expenses from Sales to be Recognized

These expenses represent the construction of sales stands, showrooms and model apartments, and the respective furniture for the units not yet sold, directly related to each project. These expenses are recognized in the result based on the Percentage of Completion (PoC) Method.

Land Bank

The total amount of land held by the Company for future development, acquired in cash and/or through physical or financial exchange transactions.

Financial Exchange

A land purchase method by means of which the site owner receives a determined percentage of revenue from the future development.

Physical Exchange

A land purchase method through which the site owner receives a determined number of units as payment.

Receitas de Vendas a Apropriar*

As receitas a apropriar correspondem às vendas contratadas, cuja receita é apropriada em períodos futuros em função do andamento da obra.

Income to be Recognized

Due to the credit arising from the recognition of revenue and costs in line with the financial progress of the works, we recognize revenue from sales already contracted in future periods. Thus, the balance of results to be recognized corresponds to contracted sales less their budgeted cost of construction, to be recognized in future periods.

Sales Speed (SS)

[contracted sales of launches in the period / launched PSV in the period, net of physical swaps].

Sales over Supply (SoS)

[contracted sales in the period / (inventories at the beginning of the period + launched PSV in the period net of physical exchanges)].

PSV or Potential Sales Value

Value obtained from the sale of all Units in a real estate project, which therefore does not represent revenue, net income or any other accounting measure accepted under BR GAAP.

Contracted Sales

Refers to each contract resulting in the sale of a property unit during a given period, including those being launched. Contracted sales are recognized in line with the completion of the works (PoC method).

Last Update on September 26, 2013