| ID | Status | Date | Public/Private | Industry | AHACPA Contact |
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| #18355 | Closed | public | _General | Les Sparks |
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I have a situtaion where the owner is asking me to write off a cosiderable amount of back rent. It looks like the operator is in some sort of financial trrouble, Can I write off the rent if the owner says they will not collect and there has been no allowence from HUD to do so. Obviously there is probably a going concern foortnote needed and a subsequyent footnote needed. At this time there has bee no oopeartor change submitted rto HUD. Maybe just a large Bad Debt allowence? I have another sitiuation where the owner has submitted operator ownerhip change to HUD complete with a lease change. Nothing has been approved by HUD.. Should I accrue rent base on the old lease until we hear from HUD? Maybe a going concern footnote nad a subsequent event footnote. Maybe Bad debt allownce similar to above. |
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Greg, sound like operators are having a hard time…
On the first one, I think an allowance, or a write-off is fine. From a GAAP perspective that is the correct approach. If we a re sure that it is uncollectible, writing it off may be the best approach. That is the proper point of view from a HUD perspective also. I am sure HUD needs the same information of a pending operator change.
On the second one I would accrue the rent. There is no relief from current operating lease on the the nursing home until HUD approves a new operator. In other words, an operator should not just be able to disappear and leave there residents alone. So, I would accrue the lease payments until a new lease is approved. Afterall, the mortgage needs to be paid regardless.
Les Sparks
From: AHACPA Support <support@ahacpa.org> |