How to Record In-Place Lease Amortization
Amortization of the intangible asset established during property acquisition representing the value of existing leases.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Amortization Expense - In-Place Leases | Expense | 8,500.00 | - |
| Accumulated Amortization - In-Place Leases | Contra-Asset | - | 8,500.00 |
💡 Accountant's Note
Upon acquisition, REITs allocate a portion of the purchase price to in-place leases. This intangible asset is amortized over the remaining lease term.
Practitioner & Systems Framework
💻 ERP Architecture
Set up as an intangible asset schedule within the fixed asset module.
⚠️ Audit Flags
Inconsistency between the amortization period and the remaining weighted average lease term (WALT).
📄 Required Documentation
Purchase Price Allocation (PPA) report and lease abstracting data.
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Discussion & Community Questions
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