How to Record Above-Market Lease Amortization
Records the monthly amortization of intangible assets related to above-market lease values identified during property acquisition.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Rental Revenue | Revenue | 1,500.00 | - |
| Intangible Assets - Above-Market Leases | Asset | - | 1,500.00 |
💡 Accountant's Note
When a REIT acquires a property with leases above market rates, an intangible asset is recognized. Amortization of this asset is recorded as a reduction to rental revenue over the remaining lease term.
Practitioner & Systems Framework
💻 ERP Architecture
Set up as a recurring manual journal entry or automated through a fixed asset module mapped to revenue.
⚠️ Audit Flags
Verification of remaining lease terms and original purchase price allocation reports.
📄 Required Documentation
Purchase Price Allocation (PPA) study and lease abstracts.
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Discussion & Community Questions
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