| ID | Status | Date | Public/Private | Industry | AHACPA Contact |
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| #15166 | Closed | public | Multifamily | _General Support |
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We are currently auditing a section 223(F) HUD-Insured project for 2020. The entity gave all tenants $100 credits for March & April 2020 to be applied to their rent as a goodwill gesture. The entity has recorded the rental income for these months in the normal manner but has recorded these credits in a separate expense account containing other covid related expenses. Do you think the credits should be directly charged against rent income. How are entities handling this circumstance in this unusual year? |
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In general I believe that these credits should have been considered a concession and should be accounted for in account 5250 – Rental Concessions. Here is the description of that that account. This account reflects the amount provided as rental concessions (i.e., free rent) in connection with the execution of leases of revenue-producing units. HUD may have some issue with the awarding of concessions due to the reg agreement, but that is where it would go. Les Sparks |