How to Record Promoted Interest Revenue
Recording incentive-based revenue earned by a REIT for exceeding performance hurdles in a joint venture.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Accrued Management Fees Receivable | Debit | 250,000.00 | - |
| Promoted Interest Income | Credit | - | 250,000.00 |
💡 Accountant's Note
Recognized when performance hurdles are met and the income is no longer subject to significant reversal (clawback).
Practitioner & Systems Framework
💻 ERP Architecture
Classify as fee income rather than rental revenue to ensure correct EBITDA adjustments.
⚠️ Audit Flags
Recognition of promote income before hurdles are fully achieved or during 'clawback' periods.
📄 Required Documentation
Joint Venture agreement waterfall schedules and internal hurdle calculations.
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Discussion & Community Questions
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