This is only a summary on proper GAAP accounting during the preacquisition stage. Additionally, costs are accounted for differently depending on the stage of the real estate project. Real estate transaction or “transaction” means an actual or prospective transaction involving a purchase, sale, option, or exchange of any interest in real property or a business opportunity, or a lease or rental of real property. For purposes of this chapter, a prospective transaction does not exist until a written offer has been signed by at least one of the parties. Through the acquisition process, the acquiring party buys the property for the seller’s price after thorough negotiations. In most cases, the equity party of the property is the larger amount of the property’s value, but there are cases where it doesn’t have to be.