How to Record REIT Advisory Fee Expense
Records the monthly management fee owed to an external advisor for overseeing the REIT's portfolio and operations.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Advisory Fee Expense | Debit | 45,000.00 | - |
| Accrued Advisory Fees Payable | Credit | - | 45,000.00 |
💡 Accountant's Note
Externally managed REITs pay advisory fees based on a percentage of assets under management (AUM) or total equity. This entry accrues the expense for the period.
Practitioner & Systems Framework
💻 ERP Architecture
Map this to General and Administrative (G&A) expenses in the corporate ledger, separate from property-level operating expenses.
⚠️ Audit Flags
Significant changes in fee amounts relative to AUM fluctuations or changes in the advisory agreement terms.
📄 Required Documentation
Advisory agreement and monthly fee calculation worksheet based on the specified AUM metric.
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Discussion & Community Questions
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