July 6, 2011
Manager of Lucernex Lease Analysis products, Mike Hammerslag, discusses recent progress by FASB / IFRS.
I have blogged previously about the tentative nature of the efforts between the FASB / IFRS. To some of you this has may have appeared harsh, while to others, it likely seemed an accurate view of FASB/IFRS positioning. In my reading of changes to the FASB/IFRS position, it true that FASB and IFRS are making progress. The most recent accomplishments from the recent meetings of these two groups are:
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Tags: FASB 13, FASB 13 changes, GAAP Accounting, Lease Administration software, retail rent accounting :: No Comments »
December 13, 2010
The following is a letter on behalf of Lucernex, Jim Duport, (see Jim’s management summary here) our in-house real estate finance expert, sent on December 7th, 2010 to FASB in response to the proposed changes to the lease accounting standards.
Technical Director
Financial Accounting Standards Board
File Reference 1850-100, FASB
401 Merritt7
PO Box 5116
Norwalk, CT 06856-5116
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sent via email to:
Director@FASB.org
Subject: File Reference 1850-100, FASB
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Re: Proposed Account Standards Update – Leases (Topic 840)
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Tags: FASB Accounting, FASB Rent Accounting, GAAP Accounting, GAAP Rent Accounting :: 1 Comment »
February 21, 2010
Lucernex expert Jim Duport (see Jim’s management summary here) discusses GAAP sublease accounting.
GAAP Sublease Accounting
Summary of GAAP/FASB Accounting for a Loss Associated with a Sublease
Our interpretation of GAAP sublease analysis according to FASB accounting rules is as follows:
Overview: Start by determining the net present value of all rental costs including write-offs of depreciation and subleasing costs, offset by the sublease income (the NPV write-off). The Income Statement (Profit & Loss statement) is then charged the NPV write-off and it is charged an interest expense based on a declining balance of the NPV write-off, the accretion interest expense. The declining balance is determined by taking the net monthly costs (including sublease income) and the interest expense and deducting that cost from the NPV write-off.
Steps are as follows:
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Tags: commercial lease analysis, commercial real estate, Commercial real estate analysis, GAAP Accounting, GAAP Sublease Accounting, Lease Administration software, lease analysis, LseMod, real estate software, sublease analysis :: 6 Comments »
January 31, 2010
Lucernex expert Jim Duport (see Jim’s management summary here) provides this response:
In essence, GAAP (Generally Accepted Accounting Principals) rent is an averaging of the rent over the term taking into account rent abatement and fixed/known rent increases. The rent cost calculated based on GAAP is then charged/booked to the Income Statement / Profit & Loss (P&L) statement. The P&L statement is what is reported to the Securities and Exchange Commission (SEC) and is used for tax purposes. In many corporations, the GAAP rent is also the cost that is charged to the real estate department’s or end-user’s budget.
CPI & GAAP — a CPI GAAP analysis
What happens if there is free rent and rent increases are based on the Consumer Price Index (CPI), a “CPI GAAP analysis”? Since increases are not a “known” value, it is difficult to apply GAAP to a lease with CPI increases.
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Tags: Commercial real estate analysis, commercial real estate software, CPI GAAP Analysis, GAAP, GAAP Accounting, GAAP impact on SOX, GAAP rent, lease accounting blog, Lease Administration software, SOX :: 6 Comments »
