February 21, 2010
Lucernex expert Jim Duport 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 »
February 14, 2010
Lucernex expert Jim Duport describes the important of the P&L statement and compares use of Cash flow analysis vs P&L analysis.
Intended for Corporate Real Estate Managers and Tenant Rep Brokers.
Importance of P&L?
First and foremost, in a corporation the cost charged to a manager’s budget is the PreTax P&L, not the Cash Flow. Since performance evaluations and bonuses are based on budgets, it is important to know how the impact of an action (e.g. leasing space) impacts the budget.
Profit & Loss (P&L) is what companies use when reporting financial results. A company’s P&L is perhaps more important than its Cash Flow. It shows whether or not a business has achieved its primary objective – earning a profit.
You have probably heard people say, “Profitability is key.” Profitability is different from Cash Flow. Profitability is the number reported to Wall Street and quoted in newspapers in earnings per share (EPS).
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Tags: cash flow vs P&L, commercial lease software, lease accounting, lease analysis, lease analysis software, LseMod, P&L vs cash flow, procalc, real estate software :: 8 Comments »
January 15, 2010
So many brokers are competing for deals with the same companies every day. I can bet that each company with a lease renewal or relocation on the horizon is about to get 20 calls a week from an almost begging the agent to get an appointment. With an already skeleton crew or perhaps nearly busting at the seams these companies are looking for the best guy or gal to get the job done quickly, efficiently and thoroughly for them. There is no time to be reviewing broker’s resumes or interviewing 5 top agent commercial houses. These CEO’s and CFO’s want to find someone who can solve their problems overnight. It’s the receptionists that file those stacks of resumes and business cards, but there is always one that catches the eye……………..
New agents today are nearing starvation to land a deal, while the “Old Dogs” still keep slamming deals out of the park. Makes you wonder how they do that……..repeat business is key of course but reinventing yourself in today’s competitive market is critical to be in front of the pack. Don’t be fooled those “Old Dogs” are learning new tricks too. (more…)
Tags: commercial real estate, commercial real estate software, lease analysis, LseMod, real estate broker, real estate software :: 1 Comment »
