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Operating Lease - Rental increase

Sharp80 · 2010-10-21 12:31:31

Hi I have a query, I have an operating lease over 10 years. I know the rent for years 1-5 (€100k per annum) but in year 5 there will be a market review of the rent. How would I account for the fair value of the lease over 10 years? The review states that it will be the fair market value how can I know what this is now?…

21-10-2010 12:31pm

#1

Sharp80

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Join Date: October 2010

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Hi

I have a query, I have an operating lease over 10 years. I know the rent for years 1-5 (€100k per annum) but in year 5 there will be a market review of the rent.

How would I account for the fair value of the lease over 10 years? The review states that it will be the fair market value how can I know what this is now?

Thanks for your help

0

Comments

#2 26-10-2010 1:41pm

dbran

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Posts: 2041

Discount the future cashflows by the current interest rate.

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