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    • From Lessee Perspective: How to deal with rentals depending on sales Percentage?

    in Lease Accounting 1 comment

    Summary:

    Hi,

    We have a scenario where we have a lease with the term of the higher of 4 % of the gross operating revenue during the year or $100,000 per annum. The lease is subject to the escalation of 5% of the $100,000 for each year. This lease last for 3 years.

    How to deal with rental payments which taking into consideration percentage of sales for a period (e.g. monthly, semiannually, annually) to determine the payment amount?


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