#Japan #Tokyo #Real Estate #AI Tool #EY Japan

EY Japan Develops AI Tool for Revenue Recognition in Real Estate Transactions

In a move to enhance audit quality and efficiency, EY ShinNihon LLC, based in Chiyoda Ward, Tokyo, has developed a new AI-driven tool specifically designed to assist in revenue recognition assessments for real estate sales transactions. This innovative "Revenue Recognition Support Tool (for Real Estate Sales Transactions)" was launched in April 2026 and aims to improve the procedures and standards in real estate audits through artificial intelligence technology.

The real estate selling process is seldom straightforward. Each transaction is unique—it can vary based on location, purpose, scale, and development status, not to mention the potential presence of buy-back clauses or additional services. Given the myriad contractual formats and stipulations involved in real estate sales, revising the related contracts to recognize revenue requires meticulous and multiple-angle scrutiny aligned with relevant accounting standards and guidelines.

Given that real estate firms may deal with thousands of such contracts annually, audits must involve detailed reviews and careful consideration of each case’s particular parameters. To alleviate the burden on auditors, the new AI tool autonomously scans real estate sales contracts and related documents, extracting relevant sections that correspond to about 20 key evaluation points specific to real estate transactions. This capability facilitates the creation of draft audit papers that comply with accounting standards, significantly streamlining the revenue recognition verification process.

The development of this tool has leveraged the extensive industry expertise accumulated within EY Japan. Auditors from within the organization collaborated closely to forge an effective prompt for the AI, integrating their in-depth knowledge of accounting rules, standards for auditing, as well as the nuances of the real estate sector. This unique integration of expertise ensures that the AI tool effectively assists auditors in recognizing revenue accurately. Furthermore, EY Japan envisions expanding the application of this innovative tool to encompass auditing for other industries that engage in individual order transactions, beyond just real estate.

By combining highly skilled professionals in accounting with advanced technology, EY Japan is continually undertaking efforts to digitize and enhance the audit process. Future initiatives will further utilize digital technologies, including AI, to bolster audit quality, ensuring that it meets or exceeds current industry standards.

About EY

EY is committed to creating new value for clients, its members, society, and the planet, striving to build a better working world through trust in capital markets. By utilizing data, AI, and cutting-edge technologies, EY teams support clients in confidently shaping their future while addressing pressing challenges both now and in the future. Their scope spans assurance, consulting, tax, strategy, and transactions, powered by accumulated industry knowledge and a collaborative global network and ecosystem of diverse partners, providing services in over 150 countries and regions.

About EY ShinNihon LLC

EY ShinNihon is the Japanese member firm of EY and focuses primarily on auditing and assurance services, while also offering advisory services. More information can be found at ey.com/ja_jp/about-us/ey-shinnihon-llc.