What are common interest realty associations?

“Common interest realty associations” is the term that is used in FASB ASC 972, “Real Estate–Common Interest Realty Association.” This term is used to describe condominium associations, homeowners’ associations, cooperative housing corporations, and other forms of common interest ownership developments that share certain characteristics: (1) separate legal entity under state law, (2) membership is automatic for property owners, (3) members share the use of common area property, (4) funding is by periodic assessment of all members, (5) members are bound by restrictive covenants, and (6) self-governance through a board of directors.