Lx LseMod Corporate GAAP Sublease

Below are examples of reports generated by Lx LseMod.

Sublease Scenario

Assume you leased space in September 2007 with a three month construction period starting in June 2007. You received 6 months of free rent and $25/sf in landlord paid construction costs.

Now you need to sublease the space and based on GAAP you have determined the date it will become "excess/obsolete" space is April 2009.

In addition to the sublease related costs, you will incur the following:

  • $50,000 in moving costs,
  • $125,000 needs to be refunded to an Economic Development Agency,
  • A write-off of $150,000 in unamortized depreciation,
  • Restoration Costs of $235,500 of which $100,000 has already been accrued.

Current Costs
Your current cash rent as of April 2009 is $32.96 with 3% increases every June.
The original lease was a Full Service lease with a 2007 base year.
Your P&L rent has been straight-lined taking into account

  • The 3 month construction period,
  • The free rent AND
  • The rent credit (based on GAAP) for amortizing the landlord paid construction costs over the lease term.

The CHALLENGE
Create a sublease analysis that includes the following:

  • A Cash Flow Cost Recovery,
  • An estimated buyout amount,
  • A GAAP compliant Write-Off and Cost Recovery, and
  • Then compare those costs to a Cash and GAAP based restructuring budget.

Lx LseMod Corporate can do all that, and more!
                             Quickly, Easily, and Accurately!

 

An example of Lx LseMod's 20+ years of enhancements to maximize flexibility
In x LseMod users have an option, not ALL costs need to be charged to the GAAP Sublease Write-Off. For instance, moving can easily be an expense that is NOT included in the GAAP Sublease Write-Off. The moving cost will show on the P&L, but not be a part of the write-off.

Sublease Assumptions Printout report

All costs shown on the Sublease Assumptions report are in the GAAP Sublease Write-Off Calculation. User's have an option of including the cost in the write-off or not including a cost.

 

Profit and Loss (P&L) Impact Report for sublease

The report below summarizes the costs from the Monthly NPV report in an annual format and shows the bottom line costs that will be charged to the P&L statement.

 

GAAP compliance - subleasing

January 2009. To our knowledge, LseMod is the ONLY lease analysis product to include ANY of these GAAP required features.

 

Cash flow without any GAAP adjustments

A Back-Up Report shows all the costs on a Cash Basis without any GAAP adjustments.

 

Sublease income and cash flow costs

A Back-Up Report that is used to calculate the Cash Flow Cost Recovery on the Sublease Assumptions report. Costs are summarized and shown on the PreTax Cash Flow report.

 

GAAP sublease calculations

A Back-Up Report that is used to calculate a GAAP Sublease Analysis. Costs are summarized and shown on the P&L Impact report.

 

Comparison of Costs per sq foot in buy vs buy

LseMod - lease analysis software for professional commercial real estate

 

Not shown. In Lx LseMod there is another program (Lx LeaseScenario that is included with the Lx LseMod product) for linking files and creating a 1-page Management Summary. The Management Summary can be used to compare different Sublease Scenarios or to Summarize the Restructuring Reserve for a number of properties. See the Management Summary in other Lx LseMod Corporate examples to see an example of Lx LeaseScenario.

January 2009. To our knowledge, Lx LseMod is the ONLY lease analysis product to include ANY of the following:

  • GAAP Compliant Sublease analysis,
  • Cash Flow Cost Recovery calculation, and
  • Comparison to a Restructuring Reserve.

 


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