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Deferred Rent

Building management forgot to charge us for parking spaces for the past 5 years - they just discovered it, so they started charging us going forward instead of making us payback what they missed. We already have a deferred rent schedule set up for our rent expense, do I need to add this extra expense to our schedule going forward or just expense it each month? Not sure how to handle this! Any help is appreciated. Thanks.

Answers

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

You should apply the kind of determination (and computation) why you deferred rent in the first place. I am assuming you deferred rent because you got some month/s rent free? If I was a stickler for GAAP, I would add the parking space deferral amounts to the rent schedule/worksheet.

Having that, and IMO, parking space/s rent is very minimal and the deferred portion (if any) would be immaterial (in relation to the extra steps/processing each month). I would just expense it as they are billed/paid.

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