v3.25.2
Basis of Presentation and Significant Accounting Policies
 6 Months Ended
Jun. 30, 2025
Accounting Policies [Abstract]  
Basis of Presentation and Significant Accounting Policies Basis of Presentation and Significant Accounting Policies
Basis of Presentation
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), for interim financial statements and the instructions to Form 10-Q. Accordingly, certain information and footnote disclosures normally included in the consolidated financial statements prepared under GAAP have been condensed or omitted. In our opinion, all adjustments considered necessary for a fair presentation of our financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These financial statements should be read in conjunction with our financial statements and notes thereto included in our 2024 Annual Report.
Principles of Consolidation
The consolidated financial statements include our financial statements and the financial statements of our wholly owned subsidiaries, partnerships and other entities in which we have a controlling interest, including variable interest entities (“VIEs”) of which we are the primary beneficiary. Entities in which we have a significant influence are accounted for under the equity method. Our VIEs are described in Note 15. All significant intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that could materially affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The ultimate impact of inflation, a currently high interest rate environment, tightening of capital markets and reduced property values, both globally and to our business, makes any estimate or assumption at June 30, 2025 inherently less certain.
Reclassification
Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. Our real estate owned assets and mortgage notes payable previously recorded within other assets and other liabilities on our consolidated balance sheets are now recorded to real estate owned, net and mortgage notes payable - real estate owned for all periods presented.
Recently Issued Accounting Pronouncements
DescriptionEffective DateEffect on Financial Statements
In May 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer. The ASU is intended to enhance consistency in practice and improve the transparency of accounting for share-based payments made to customers. Key provisions of the ASU include an updated definition of a "performance condition" to include vesting terms based on a customer’s purchases or the purchases of the customer’s customers. The ASU also removes the existing accounting policy election that allowed entities to recognize forfeitures of customer awards as they occur. Instead, entities are now required to estimate expected forfeitures for awards with service conditions. Lastly, the ASU clarifies that the variable consideration constraint under ASC 606 does not apply to share-based payments made to customers.First quarter of 2027, with early adoption permittedWe currently do not have any transactions that fall under the scope of this ASU.
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity. This ASU addresses concerns about inconsistent accounting outcomes in business combinations involving VIEs. Under previous GAAP, the primary beneficiary of a VIE was automatically deemed the accounting acquirer in a business combination, regardless of transaction structure. The ASU revises this approach by requiring entities to assess specific criteria to determine the appropriate accounting acquirer when the following conditions are met: (1) the transaction is primarily effected through the exchange of equity interests, (2) the legal acquiree is a VIE, and (3) the legal acquiree qualifies as a business under ASC 805. The amendments are to be applied prospectively.First quarter of 2027, with early adoption permittedWe currently do not have any transactions that fall under the scope of this ASU.
Significant Accounting Policies
See Item 8 – Financial Statements and Supplementary Data in our 2024 Annual Report for a description of our significant accounting policies. There have been no significant changes to our significant accounting policies since December 31, 2024.