Why does each property need its own entity?

Usually for liability separation, financing and investor structuring reasons, since lenders and co-investors often require a single-purpose entity per asset. The accounting consequence is that a portfolio is a group of small companies rather than one business with departments, so comparability has to be designed in rather than assumed.

What should a real estate capitalisation policy cover?

A dollar threshold below which spend is expensed regardless, the distinction between a repair that maintains the asset and an improvement that extends its life or capacity, the treatment of tenant improvements, and how the land and building split is determined at acquisition. Without a written policy, the treatment defaults to whoever entered the transaction, which is how two identical roofs end up on different sides of the P&L.

How should intercompany funding between a holding entity and SPVs be recorded?

As a matched pair, with a documented rule about which entity records first and how the balance is characterised, whether as a loan, a capital contribution or an expense recharge. The characterisation matters because it affects both the balance sheet presentation and the tax treatment. One-sided entries are the single most common cause of a portfolio consolidation that will not tie.

Can SPVs share one chart of accounts if they have different investors?

Yes, and they generally should. A shared chart of accounts governs how transactions are classified, not who sees the output. Reporting permissions and investor-level statements are handled separately, so different investor groups can receive different reports from a consistent underlying structure.

What does per-asset reporting need to show?

Revenue and operating expenses at property level, net operating income calculated on a consistent basis across the portfolio, capital expenditure separated from operating spend, and debt service. The consistency matters more than the sophistication: a simple report on one basis is more useful than a detailed one where each asset is measured differently.

Real estate · 🇺🇸 United StatesScenario

Standardising bookkeeping across a portfolio of SPV entities

Assets held in separate SPVs cannot be compared until they share one chart of accounts and one written capitalisation policy, because the same category of spend capitalised in one entity and expensed in another produces returns that differ for accounting reasons rather than operating ones. This is an illustrative example of how Salt approaches multi-entity property accounting, using a US operator with 14 SPVs as the profile.

Ask how we'd handle this

Scenario — an illustrative example of how Salt approaches this problem. Not a description of a specific client engagement.

The business shape it describes: US real estate operator, 14 SPV entities.

Scenario covers: Multi-entity bookkeeping standardisation and investor reporting
Jurisdiction: United States
Sector: Real estate

The setup

Take a US real estate operator holding each property in its own SPV, several of them set up by different accountants at different times.
There is no way to compare operating performance between assets, and investor reporting is assembled by hand each quarter from fourteen different starting points.

What usually turns out to be wrong

Fourteen different charts of accounts, so no line item is comparable and the portfolio view is a manual mapping exercise repeated every quarter.
Capitalisation policy applied inconsistently. The same roof, boiler or fit-out spend is capitalised in some entities and expensed in others, which moves reported net operating income without anything happening on the property.
Intercompany funding between the holding entity and the SPVs recorded inconsistently, so several balances exist on one side only.
No consistent treatment of the split between land and building, or of what falls into each depreciable class, which affects both reported returns and the tax position.

How this would be worked

Standardise the chart of accounts across all entities, with the property-level detail that per-asset reporting actually needs rather than a generic template.
Write one capitalisation policy, including thresholds and the treatment of repairs versus improvements, and apply it consistently across every entity.
Restate where the previous treatment diverged from the new policy, so the comparison is like for like rather than partially corrected.
Introduce consistent intercompany treatment with a rule about which entity books first, then match balances before each close.
Build per-asset reporting that is generated from the ledger rather than assembled in a spreadsheet each quarter.

Why we'd be the right fit

Standardising entities built by different accountants means settling one capitalisation policy and then restating everything that departed from it, including figures investors have already been shown.
The mechanics are ordinary multi-entity work. Agreeing in advance that the restatement will be published is the part that decides whether the project gets finished.

What the business would be able to do

Asset-level performance would be comparable, so an underperforming property is visible as an operating problem rather than an accounting artefact.
Investor reporting would be generated from the ledger rather than assembled by hand each quarter.
Intercompany balances would agree, because they are matched before the close under a rule rather than reconciled afterwards.

What we'd flag

Standardising capitalisation policy changes reported returns on individual assets in both directions, and some of those figures have already been shown to investors. That conversation has to happen, and it is not a comfortable one.

Answers

Standardising bookkeeping across a portfolio of SPV entities

Where this applies

BookkeepingService ControllerService All services in United StatesUS GAAP More scenarios42 illustrative, labelled examples

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