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		Document

August 21, 2019

Via EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

Washington, D.C.  20549

Re:    Cousins Properties Incorporated

Form 10-K For the Fiscal Year Ended December 31, 2018

Filed February 6, 2019

Form 10-Q For the Quarterly Period Ended March 31, 2019

Filed May 9, 2019

File No. 001-11312

Ladies/Gentlemen:

The following information is in response to the comments of the Staff of the Securities and Exchange Commission (“SEC”) set forth in the letter dated August 7, 2019.

Form 10-Q For the Quarterly Period Ended March 31, 2019

3. Transactions with Norfolk Southern Railway Company, page 10

Comment:  We note that all contracts and transactions associated with Norfolk Southern Railway ("NS") have been combined for accounting purposes and represent a single performance obligation. Please elaborate and tell us the facts and circumstances related to your transaction and reference the specific authoritative accounting literature relied upon, that supports your accounting treatment. Your response should specifically explain your basis for inclusion of the sale of land and acquisition of building within the combined transaction and recognition of the excess of the fair value of 1200 Peachtree as part of the gross transaction price versus treatment of 1200 Peachtree as an asset acquisition with purchase price allocated based on relative fair value.

Response:

Facts and Circumstances of the Transaction

As described in the Cousins Properties Incorporated’s (“Cousins,” the “Company,” “we,” or “our”) Form 10-Q for the Quarterly Period ended March 31, 2019, we entered into a series of separate legal agreements with Norfolk Southern Railway Company (“NS”) on March 1, 2019 related to the single commercial objective of managing the site selection, development and construction of a corporate headquarters for NS in Atlanta.  All of the agreements were negotiated and executed simultaneously to achieve a single commercial objective and certain of the agreements stipulated that they were contingent upon the execution of other agreements. Below is a description of the agreements and transactions executed with NS that are collectively referred to below as the “Contracts”:

•

 Land Agreement – We sold 3.1 acres of land at 3rd and Ponce in Atlanta to NS for $52.5 million.  Our carrying value of the land, acquired from unrelated third parties in the fourth quarter of 2018 and first quarter of 2019, inclusive of capitalized site preparation work, was $47.5 million.  This site is the location of NS’s new corporate headquarters building.

•

 Building Purchase and Lease Agreement – We purchased 1200 Peachtree from NS for $82 million and entered into a three-year lease (at market rates) with NS for the entire building.  NS will continue to occupy 1200 Peachtree while its new corporate headquarters building is being constructed, and will vacate 1200 Peachtree upon completion of its new corporate headquarters building but has the right to extend the lease if delivery of the new headquarters is delayed.

•

 Development Agreement – We entered into a Development Agreement with NS which requires that we provide certain development services to NS related to the development of its new corporate headquarters building.  Total cash consideration payable to us over the period covered by the Development Agreement is $5 million.

•

 Consulting Agreement – We entered into a Consulting Agreement with NS which provided that we provide certain consulting services to NS related to the development of its new corporate headquarters building.  Total cash consideration payable to us over the period covered by the Consulting Agreement is $32 million.

The Contracts memorialize the economic arrangement that was negotiated over several months for Cousins to receive approximately $52 million in total consideration.  All of the Contracts were negotiated and executed simultaneously and the consideration to be paid in each contract depended on the consideration in the other contracts.

Accounting Analysis

We analyzed the Contracts in accordance with ASC 606, ASC 610-20, ASC 842, and other applicable accounting guidance. In particular, we addressed the combining of the contracts, the identification of components and performance obligations and the inclusion of non-cash consideration in the transaction price, as follows:

Combining of the Contracts

As noted above, there are multiple legal agreements associated with our arrangement with NS. Given the multiple agreements associated with the overall arrangement, we evaluated whether each agreement should be considered independently or if all the agreements together should be considered a single arrangement for accounting purposes.

ASC 606 provides guidance that is applicable to our situation and states in paragraph 606-10-25-9 the following:

An entity shall combine two or more contracts entered into at or near the same time with the same customer (or related parties of the customer) and account for the contracts as a single contract if one or more of the following criteria are met:

a)

 The contracts are negotiated as a package with a single commercial objective.

b)

 The amount of consideration to be paid in one contract depends on the price or performance of the other contract.

c)

 The goods or services promised in the contracts (or some goods or services promised in each of the contracts) are a single performance obligation in accordance with paragraphs 606-10-25-14 through 25-22.

As the overall transaction includes a lease component, we further considered ASC 842, Leases, and the guidance on combining contracts under ASC 842-10-25-19, which states the following:

An entity shall combine two or more contracts, at least one of which is or contains a lease, entered into at or near the same time with the same counterparty (or related parties) and consider the contracts as a single transaction if any of the following criteria are met:

a.

 The contracts are negotiated as a package with the same commercial objective(s).

b.

 The amount of consideration to be paid in one contract depends on the price or performance of the other contract.

c.

 The rights to use underlying assets conveyed in the contracts (or some of the rights of use conveyed in the contracts) are a single lease component in accordance with paragraph 842-10-15-28.

In evaluating whether the Contracts should be combined, we observed the consistency in ASC 606 and ASC 842 guidance. Specifically, both paragraphs include two requirements for contract combinations in their first sentences:  (1) “at or near the same time” and (2) “with the same counterparty”. As described in the Facts and Circumstances of the Transaction section above, all of the Contracts executed in connection with the transaction were negotiated and executed simultaneously (on March 1, 2019), with the same counterparty (NS), and certain of the Contracts stipulated that they

were contingent upon the execution of other Contracts thereby supporting the criterion (a) in both 606-10-25-9 and 842-10-25-19.  Additionally, criterion (b) in both ASC 606-10-25-9 and ASC 842-10-25-19 is met as the Contracts would not have been executed individually.  While the amount of consideration in each Contract does not contractually depend of the others, they would not have otherwise been entered into independently; and therefore, we believe that the consideration to be paid under each Contract depends on the performance of the other and that there is price independency whereby the economics of our arrangements with NS would not be properly reflected in our consolidated financial statements if we accounted for each Contract individually.  As a result, we concluded that the Contracts should be considered a single arrangement for accounting purposes under ASC 606 and ASC 842.

Components and Performance Obligations under the Contracts

Given the fact that there are multiple elements and deliverables under the Contracts, we specifically evaluated the accounting for the various components under ASC 842, ASC 610-10 and ASC 606.

We first considered the guidance in ASC 842 and identified a lease component, NS’s three-year lease of 1200 Peachtree.  Because we determined that the lease was at market (based on a purchase price allocation prepared by a third party), we allocated no additional consideration to the lease component using the relative selling price method.  Next, we considered whether the non-lease components to provide goods and services to NS were within the scope of ASC 606 and determined that, consistent with our historical policy, the sale of land is not in the scope of ASC 606 because it constitutes the sale of a nonfinancial asset that is not part of the entity’s ordinary activities.  As such, we determined that it is within the scope of ASC 610-20.  Applicable guidance from ASC 606 as well as ASC 610-20 in evaluating the derecognition of the land component is as follows [emphasis added]:

606-10-15-3--An entity shall apply the guidance in this Topic to a contract (other than a contract listed in paragraph 606-10-15-2) only if the counterparty to the contract is a customer. A customer is a party that has contracted with an entity to obtain goods or services that are an output of the entity’s ordinary activities in exchange for consideration. A counterparty to the contract would not be a customer if, for example, the counterparty has contracted with the entity to participate in an activity or process in which the parties to the contract share in the risks and benefits that result from the activity or process (such as developing an asset in a collaboration arrangement) rather than to obtain the output of the entity’s ordinary activities.

606-10-15-4--A contract with a customer may be partially within the scope of this Topic and partially within the scope of other Topics listed in paragraph 606-10-15-2.

a)

 If the other Topics specify how to separate and/or initially measure one or more parts of the contract, then an entity shall first apply the separation and/or measurement guidance in those Topics. An entity shall exclude from the transaction price the amount of the part (or parts) of the contract that are initially measured in accordance with other Topics and shall apply paragraphs 606-10-32-28 through 32-41 to allocate the amount of the transaction price that remains (if any) to each performance obligation within the scope of this Topic and to any other parts of the contract identified by paragraph 606-10-15-4(b).

b)

 If the other Topics do not specify how to separate and/or initially measure one or more parts of the contract, then the entity shall apply the guidance in this Topic to separate and/or initially measure the part (or parts) of the contract.

610-20-32-2--When an entity meets the criteria to derecognize a distinct nonfinancial asset or a distinct in substance nonfinancial asset, it shall recognize a gain or loss for the difference between the amount of consideration measured and allocated to that distinct asset in accordance with paragraphs 610-20-32-3 through 32-6 and the carrying amount of the distinct asset. The amount of consideration promised in a contract that is included in the calculation of a gain or loss includes both the transaction price and the carrying amount of liabilities assumed or relieved by a counterparty.

610-20-32-3--To determine the transaction price, an entity shall apply the following paragraphs in Topic 606 on revenue from contracts with customers:

a)

 Paragraphs 606-10-32-2 through 32-27 on determining the transaction price, including all of the following:

1)

 Estimating variable consideration

2)

 Constraining estimates of variable consideration

3)

 The existence of a significant financing component

4)

 Noncash consideration

5)

 Consideration payable to a customer.

b)

 Paragraphs 606-10-32-42 through 32-45 on accounting for changes in the transaction price.

610-20-32-6--An entity shall allocate the consideration calculated in accordance with the guidance in paragraphs 610-20-32-2 through 32-5 to each distinct nonfinancial asset or in substance nonfinancial asset by applying the guidance in paragraphs 606-10-32-28 through 32-41.

In accordance with the guidance above, we identified a distinct nonfinancial asset (land) and recognized no gain or loss on March 1, 2019, the date we sold, and therefore lost control of, the land as we concluded that the fair value of the land and, therefore the allocated consideration in the arrangement (using the relative selling price method), equaled our carrying amount of the land. We concluded the fair value of the land sold (i.e., the price for which we would have sold the land on a standalone basis) was $47.5 million because there was not a significant change in value during the period between the date the land was acquired and the date the land was sold (less than 6 months). The $5 million difference between the $52.5 million contractual selling price and $47.5 million allocated to the land component formed part of our transaction price that was allocated to the ASC 606 services component described below.

Having identified a lease component and a nonfinancial asset sale, we considered the guidance in ASC 606 to evaluate the remaining services promised to NS under the Contracts to determine the performance obligations related to these remaining services.

Within the Contracts with NS, there are numerous deliverables (both explicit and implied) outside of the lease component and land sale that range from site selection services to schedule planning to assisting NS with engaging architects to providing design services to land entitlement/acquisition to assisting NS with engaging contractors for construction services to warranty services to providing accounting and reporting services.  Applicable guidance from ASC 606 in evaluating the number of performance obligations associated with this arrangement is as follows:

606-10-25-14--At contract inception, an entity shall assess the goods or services promised in a contract with a customer and shall identify as a performance obligation each promise to transfer to the customer either:

a)

 A good or service (or a bundle of goods or services) that is distinct.

b)

 A series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer (see paragraph 606-10-25-15).

606-10-25-19--A good or service that is promised to a customer is distinct if both of the following criteria are met:

a)

 The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (that is, the good or service is capable of being distinct).

b)

 The entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (that is, the promise to transfer the good or service is distinct within the context of the contract).

606-10-25-21--In assessing whether an entity’s promises to transfer goods or services to the customer are separately identifiable in accordance with paragraph 606-10-25-19(b), the objective is to determine whether the nature of the promise, within the context of the contract, is to transfer each of those goods or services individually or, instead, to transfer a combined item or items to which the promised goods or services are

inputs. Factors that indicate that two or more promises to transfer goods or services to a customer are not separately identifiable include, but are not limited to, the following:

a)

 The entity provides a significant service of integrating goods or services with other goods or services promised in the contract into a bundle of goods or services that represent the combined output or outputs for which the customer has contracted. In oth