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Revenue Recognition | 9 Months Ended
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Sep. 30, 2018
Revenue From Contract With Customer [Abstract] |
Revenue Recognition |
2. | Revenue Recognition
The Company adopted the accounting guidance for revenue from contracts with customers (“Topic 606”) on January 1, 2018 using the modified retrospective approach and therefore, the comparative information has not been adjusted. The guidance has been applied to contracts that are not completed as of the date of initial application. Most significantly for the real estate industry, leasing transactions are not within the scope of the new standard. A majority of the Company’s tenant-related revenue is recognized pursuant to lease agreements and are governed by the leasing guidance discussed in Note 1. Historically, the majority of the Company’s lease commission revenue was recognized 50% upon lease execution and 50% upon tenant rent commencement. Upon adoption of Topic 606, lease commission revenue is generally recognized in its entirety upon lease execution. The impact of adopting Topic 606 on the Company’s consolidated financial statements with respect to the change in revenue recognition as related to lease commissions revenue at January 1, 2018 and for the three and nine months ended September 30, 2018 was not material. The following is disclosure of the Company’s revenue recognition policies: Rental Revenue Minimum rents from tenants in shopping centers generally range from one month to 30 years and are recognized on a straight-line basis over the noncancelable term of the lease, which include the effects of applicable rent steps and abatements. Percentage and overage rents are recognized after a tenant’s reported sales have exceeded the applicable sales breakpoint set forth in the applicable lease. Recoveries from tenants Revenues associated with expense reimbursements from tenants for common area maintenance, taxes, insurance and other property operating expenses, based upon the tenant’s lease provisions, are recognized in the period the related expenses are incurred. Lease Termination Fees Lease termination fees are recognized upon the effective termination of a tenant’s lease when the Company has no further obligations under the lease. Ancillary income and other property income Ancillary and other property-related income, primarily composed of leasing vacant space to temporary tenants, kiosk income, parking and theatre income, is recognized in the period earned. Business Interruption Income The Company will record revenue for covered business interruption in the period it determines that it is probable it will be compensated and the applicable contingencies with the insurance company are resolved. This income recognition criteria will likely result in business interruption insurance recoveries being recorded in a period subsequent to the period the Company experiences lost revenue from the damaged properties. Disposition of Real Estate Sales of nonfinancial assets, such as real estate, are to be recognized when control of the asset transfers to the buyer, which will occur when the buyer has the ability to direct the use of, or obtain substantially all of the remaining benefits from, the asset. This generally occurs when the transaction closes and consideration is exchanged for control of the asset. Revenues from Contracts with Customers The Company’s revenues from contracts with customers generally relate to asset and property management fees, leasing commission, and development fees. These revenues are derived from the Company’s management agreements with RVI and unconsolidated joint ventures and, in the case of unconsolidated joint ventures, are recognized to the extent attributable to the unaffiliated ownership in the unconsolidated joint venture to which it relates. Termination rights under these contracts vary by contract, but generally include termination for cause by either party or due to sale of the property. Asset and Property Management Fees Asset and property management services include property maintenance, tenant coordination, accounting and financial services. Asset and Property management services represent a series of distinct daily services. Accordingly, the Company satisfies the performance obligation as services are rendered over time. The Company is compensated for property management services through a monthly management fee earned based on a specified percentage of the monthly rental receipts generated from the property under management. The Company is compensated for asset management services through a fee that is billed to the customer monthly and recognized as revenue monthly as the services are rendered, based on a percentage of aggregate asset value or capital contributions for assets under management at the end of the quarter. The RVI management contracts have fixed fees for a six-month period prior to reset based upon the properties under management. Property Leasing The Company provides strategic advice and execution to third parties in connection with the leasing of retail space. The Company is compensated for services in the form of a commission. The commission is paid upon the occurrence of certain contractual events which may be contingent. For example, a portion of the commission may be paid upon execution of the lease by the tenant, with the remaining paid upon occurrence of another future contingent event (e.g. payment of first month’s rent or tenant move-in). The Company typically satisfies its performance obligation at a point in time when control is transferred; generally, at the time of the first contractual event where there is a present right to payment. The Company looks to history, experience with a customer, and deal specific considerations, to support its judgment that the second contingency will be met. Therefore, the Company typically accelerates the recognition of revenue associated with the second contingent event (if any) to the point in time when control of its service is transferred. Development Services Development services consist of construction management oversight services such as hiring general contractors, reviewing plans and specifications, performing inspections, reviewing documentation and accounting services. These services represent a series of distinct services and are recognized over time as services are rendered. The Company is compensated monthly for services based on percentage of aggregate amount spent on the construction during the month. Disposition Fees The Company receives disposition fees equal to 1% of the gross sales price of each RVI asset sold. The Company is compensated at the time of the closing of the transaction. Contract Assets Contract assets represent assets for revenue that has been recognized in advance of billing the customer and for which the right to bill is contingent upon something other than the passage of time. This is common for contingent portions of commissions. The portion of payments retained by the customer until the second contingent event is not considered a significant financing component because the right to payment is expected to become unconditional within one year or less. Contract assets are transferred to receivables when the right to payment becomes unconditional. Revenue from contracts with customers is included in Fee and Other Income on the consolidated statements of operations and was composed of the following (in thousands):
| Three Months |  |  | Nine Months |
| Ended September 30, |  |  | Ended September 30, |
| 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
Revenue from contracts with customers: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset and property management fees | $ | 10,501 |  |  | $ | 4,660 |  |  | $ | 20,982 |  |  | $ | 16,851 |
Leasing commissions |  | 1,818 |  |  |  | 1,521 |  |  |  | 4,752 |  |  |  | 4,849 |
Development fees |  | 393 |  |  |  | 318 |  |  |  | 1,021 |  |  |  | 1,351 |
Disposition fees |  | 1,622 |  |  | — |  |  |  | 1,622 |  |  | — |
Credit facility guaranty fee |  | 60 |  |  |  | — |  |  |  | 60 |  |  |  | — |
Total revenue from contracts with customers |  | 14,394 |  |  |  | 6,499 |  |  |  | 28,437 |  |  |  | 23,051 |
Other fee income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ancillary and other property income |  | 2,384 |  |  |  | 4,444 |  |  |  | 11,607 |  |  |  | 13,535 |
Lease termination fees |  | 99 |  |  |  | 9,380 |  |  |  | 3,316 |  |  |  | 10,188 |
Other |  | 724 |  |  |  | 792 |  |  |  | 1,987 |  |  |  | 2,466 |
Total fee and other income | $ | 17,601 |  |  | $ | 21,115 |  |  | $ | 45,347 |  |  | $ | 49,240 |
The aggregate amount of receivables from contracts with customers was $1.6 million and $1.9 million as of September 30, 2018 and December 31, 2017, respectively. Contract assets are included in Other Assets, net on the consolidated balance sheets. The significant changes in the contract asset balances during the nine months ended September 30, 2018 are as follows (in thousands):
Balance as of January 1, 2018 | $ | 1,371 |
Contract assets recognized |  | 1,732 |
Contract assets billed |  | (1,738 | )
Balance as of September 30, 2018 | $ | 1,365 |
All revenue from contracts with customers meets the exemption criteria for variable consideration directly allocable to wholly unsatisfied performance obligations or unsatisfied promise within a series and, therefore, the Company does not disclose the value of transaction price allocated to unsatisfied performance obligations. There is no fixed consideration included in the transaction price for any of these revenues.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
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