What is an above market lease intangible?
Above-market lease intangibles are amortized over the remaining terms of the leases, and are reflected as a reduction of base rent in the Company’s consolidated statement of income.
What are lease intangibles?
Leased Intangible Property means all agreements, service contracts, equipment leases, booking agreements and other arrangements or agreements affecting the ownership, repair, maintenance, management, leasing or operation of the Leased Property, or any portion thereof, to which Landlord is a party; all books, records …
Is a lease considered an intangible asset?
A leasehold differs from a regular lease in that it gives the tenant the right to exclusively possess and use real property for a fixed time period. Since the leasehold serves as a contractually provided interest, not the actual building, it is an intangible asset.
What is a below market lease?
For below-market leases, the remaining lease term is typically projected to include all defined, favorable option terms. Contracts with above-market rents have a positive fair value (i.e., an asset exists) Contracts with below-market rents have a negative fair value (i.e., a liability exists)
What are above market leases?
A lease executed at the market lease rate is said to be “at market” or “market rate.” Leases with rental rates greater than or less than the prevailing market rate are said to be “above market” or “below market, respectively.
What is an above market lease?
Are lease liabilities intangible?
Lease-related assets and liabilities The following are not recorded as a separate intangible, instead they are included as an adjustment to the right-of-use asset: Favorable or unfavorable rental rates.
Are contracts intangible assets?
Contracts: Certain contracts, such as employment, affiliation, advertising, or sales contracts, can be treated as intangible assets because they add value to a company. For example, a long-term lease at below-market rates can represent a huge overhead savings.
What is above market lease?
What is the fair value of a below market lease?
For below–market leases, the remaining lease term is typically projected to include all defined, favorable option terms. Contracts with above-market rents have a positive Fair Value (i.e., an asset exists) Contracts with below-market rents have a negative Fair Value (i.e., a liability exists)
What does it mean when a lease is above market?
Leases with rental rates greater than or less than the prevailing market rate are said to be “above market” or “below market, respectively. A landlord may offer below market rates to attract new tenants.
When is an intangible asset or liability recognized on a lease?
An intangible asset or liability may also be recognized if the lease contract terms are favorable or unfavorable as compared to market terms.
Are below-market lease contracts a liability or asset?
To the contrary, below-market lease contracts would be considered a liability via the income impairment throughout the term of the lease.