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INVESTMENTS IN UNCONSOLIDATED ENTITIES | 9 Months Ended
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Sep. 30, 2022
Equity Method Investments and Joint Ventures [Abstract] |
INVESTMENTS IN UNCONSOLIDATED ENTITIES | INVESTMENTS IN UNCONSOLIDATED ENTITIESWe may enter into joint ventures as a means of accessing larger parcels of land, expanding our market opportunities, managing our risk profile, optimizing deal structure for the impacted parties and leveraging our capital. While purchasing land through a joint venture can be beneficial, currently we do not view joint ventures as critical to the success of our homebuilding operations. Our joint venture partners generally are other homebuilders, land sellers or other real estate investors. We generally do not have a controlling interest in these ventures, which means our joint venture partners could cause the venture to take actions we disagree with or fail to take actions we believe should be undertaken, including the sale of the underlying property to repay debt or recoup all or part of the partners' investments. Based on the structure of these joint ventures, they may or may not be consolidated into our results. As of September 30, 2022, we had two active equity-method land joint ventures and one mortgage joint venture, which is engaged in mortgage activities and primarily provides services to our homebuyers. Summarized condensed combined financial information related to unconsolidated joint ventures that are accounted for using the equity method was as follows (in thousands):
| As of
| September 30, 2022 |  | December 31, 2021
Assets: |  |  |
Cash | $ | 2,768 |  |  | $ | 7,983 |
Real estate | 17,628 |  |  | 7,989 |
Other assets | 7,844 |  |  | 3,903 |
Total assets | $ | 28,240 |  |  | $ | 19,875 |
Liabilities and equity: |  |  |
Accounts payable and other liabilities | $ | 6,870 |  |  | $ | 7,899 |
Equity of: |  |  |
Meritage (1) | 10,195 |  |  | 4,752 |
Other | 11,175 |  |  | 7,224 |
Total liabilities and equity | $ | 28,240 |  |  | $ | 19,875 |
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Revenue | $ | 12,083 |  |  | $ | 10,070 |  |  | $ | 31,161 |  |  | $ | 29,173 |
Costs and expenses | (9,535) |  |  | (8,171) |  |  | (25,743) |  |  | (24,700) |
Net earnings of unconsolidated entities | $ | 2,548 |  |  | $ | 1,899 |  |  | $ | 5,418 |  |  | $ | 4,473 |
Meritage’s share of pre-tax earnings (1) (2) | $ | 1,558 |  |  | $ | 1,071 |  |  | $ | 3,750 |  |  | $ | 2,878 |
(1)Balance represents Meritage’s interest, as reflected in the financial records of the respective joint ventures. This balance may differ from the balance reported in the accompanying unaudited consolidated financial statements due to the following reconciling items: (i) timing differences for revenue and distributions recognition, (ii) step-up basis and corresponding amortization, (iii) capitalization of interest on qualified assets, (iv) income deferrals as discussed in Note (2) below and (v) the cessation of allocation of losses from joint ventures in which we have previously written down our investment balance to zero and where we have no commitment to fund additional losses. (2)Our share of pre-tax earnings from our mortgage joint venture is recorded in Earnings from financial services unconsolidated entities and other, net on the accompanying unaudited consolidated income statements. Our share of pre-tax earnings from all other joint ventures is recorded in Other (expense)/income, net on the accompanying unaudited consolidated income statements and excludes joint venture profit related to lots we purchased from the joint ventures, if any. Such profit is deferred until homes are delivered by us and title passes to a homebuyer.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI https://asc.fasb.org/topic&trid=2196965 + Details
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