Howard Hughes Corp adopted a new revenue recognition standard in Q1 2018 that significantly reduced GAAP revenue and earnings but not intrinsic value or cash flows.

True: Howard Hughes Corp's Q1 2018 10-Q or earnings release shows that it adopted the new revenue recognition standard (ASC 606) in Q1 2018, and that this materially reduced reported GAAP revenue and earnings for the quarter (e.g., condominium revenue moved from percentage-of-completion to completed-contract recognition), with no change to cash flows. Treat the 'intrinsic value' part as opinion; it is satisfied if the change was purely an accounting timing change. Mostly true: it was adopted and reduced revenue and earnings, but the effect was modest rather than 'significant', or one of the details (e.g., the effect on earnings) differs slightly. Mixed: it was adopted, but the reduction applied to only one of revenue or earnings, or was small. Mostly false: it was adopted but had little effect on reported results, or the standard did affect cash flow presentation in substance. False: HHC did not adopt the standard in that quarter, or the adoption increased revenue and earnings.

Set before the research began.

1. E1 The Howard Hughes Corporation® Reports First Quarter 2018 Results | Howard Hughes Holdings Inc. The Howard Hughes Corporation (via investor relations site) · 1 May 2018 Own record

   “We adopted the new revenue recognition standard on January 1, 2018, as mandated by the Financial Accounting Standards Board for all public companies.”

2. E2 The Howard Hughes Corporation® Reports First Quarter 2018 Results | Howard Hughes Holdings Inc. The Howard Hughes Corporation (via investor relations site) · 1 May 2018 Own record

   “During the first quarter of 2018, our total revenues were $161.7 million, a decrease of $70.1 million compared to the first quarter of 2017, driven by a decline in our Strategic Developments segment primarily due to a required change in accounting method as to how we must now recognize revenue in our condominium projects.”

3. E3 The Howard Hughes Corporation® Reports First Quarter 2018 Results The Howard Hughes Corporation (Communities site, reproducing PRNewswire release) · 1 May 2018 Own record

   “This change relates only to the timing of revenue recognition and will more closely match the actual cash flows from the sale of units.”

4. E4 Howard Hughes Holdings Inc. (HHC) Q1 FY2018 Earnings Call Transcript - May 2, 2018 roic.ai (transcript aggregator) · 2 May 2018

   “This change relates solely to the timing of recognizing revenue on these sales.”

HHC's Q1 2018 earnings release says the company adopted the new revenue recognition standard on January 1, 2018 (E1). It reports that total revenues fell $70.1 million year over year to $161.7 million, mainly because of the required change in how condominium revenue is recognised (E2). The company describes the change as affecting only the timing of revenue recognition (E3, E4), which fits the claim that cash flows were unaffected. The quoted evidence does not separately state how much the change reduced GAAP earnings, so that part of the claim is not directly confirmed, and the verdict is mostly true rather than true.