Quarterly report pursuant to Section 13 or 15(d)

Changes in Contingently Redeemable Noncontrolling Interest

Changes in Contingently Redeemable Noncontrolling Interest
6 Months Ended
Jun. 30, 2021
Changes In Contingently Redeemable Minority Interest [Abstract]  
Changes in Contingently Redeemable Noncontrolling Interest
Changes in Contingently Redeemable Noncontrolling Interest
FoA Equity determined that the Class B interests of FACo Holdings issued to Buy to Rent Platform Holdings, L.P. (“B2R”) meet the definition of CRNCI. Under the FACo Holdings Agreement, the Class B Units may be redeemed upon sale of FACo by FACo Holdings, sale of FAH, or sale of UFG Holdings LLC, which would require FAH to purchase the outstanding Class B Units. FoA Equity determined that the legal provisions in the FACo Holdings Agreement in which there is a noncontrolling interest represent a substantive profit-sharing arrangement, where the allocation to the members differs from the stated ownership percentages. FoA Equity utilized the hypothetical liquidation at book value, or HLBV, method for the allocation of profits and losses each period. Under the HLBV method, the amount of income and loss attributed to the noncontrolling interests in the Consolidated Statements of Operations reflects changes in the amounts each member would hypothetically receive at each Consolidated Statement of Financial Condition date under the liquidation provisions of the FACo Holdings Agreement, assuming the net assets of the FACo Holdings were liquidated at their respective recorded amounts. Allocations of profits and losses in the Consolidated Statements of Operations is determined based on the hypothetical amounts that would be distributed to members after taking into account any capital transactions between FACo Holdings and its members as follows:
Distributions up to Hurdle Amount of $202.0 million (subject to certain adjustments defined in the FACo Holdings Agreement)—100% to Class B Members;
Distributions of the next $150.0 million—95% to Class A Members and 5% to Class B Members, and;
Thereafter—75% to Class A Members and 25% to Class B Members.
In connection with the closing of the Business Combination disclosed in Note 4—Acquisitions, FoA caused Finance of America Holdings LLC to exercise its right under the FACo Holdings Agreement to purchase all of the outstanding Class B Units held by B2R for a redemption price of $203.2 million in satisfaction of the applicable Hurdle Amount under the FACo Holdings Agreement. The changes in CRNCI are as follows (in thousands):
Balance at December 31, 2019 (audited)
   $ 187,981  
Net loss
Balance at March 31, 2020
Net loss
Balance at June 30, 2020
   $ 169,975  
Balance at December 31, 2020 (audited)
   $ 166,231  
Net income
Accretion to redemption price
Balance at March 31, 2021
Balance at April 1, 2021
   $ 203,216  
Settlement of CRNCI in connection with the Business Combination
Balance at June 30, 2021
   $ —