Accounting for Deferral and Waiver components of Covid 19 related Rent Relief

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As the landlord, I'm offering rent relief in line with the mandatory code of conduct, 50% of that relief is a waiver, and 50% is deferred for 6 months, to be paid back equally over the following 12 months. 

I'm assuming a Deferred Rent Liability would be used to post the credit to but I'm not sure how to show either component on the invoice for the months rent that has teh rent relief applied for either the deferral or waiver component. 

Your suggestions are very welcome!
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Stephen Grocott

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Posted 1 month ago

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Felicity Bleckly

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I think I would enter the full rent for each month. Then I'd enter a credit to show the waiver (against the property's rent income) and a credit for the deferred amount ( to an asset future rent payment account) so the invoice total is the amount you expect to be paid this month. Do that for each of the months which apply. Then when you can start to get the deferred amounts enter them on the invoice coded to the future rent payment account each month until it reaches $0. Many places do a perpetual rent invoice and not one for every month. So another way might be to enter a rent invoice for the full reduced period covered by the waiver etc, with a credit and the deferred amount, perhaps itemizing for each month. A new invoice at the end of this horrible period would show the next 12minths with the rent for each month and the deferred rent for each month. Coding to future rent account and then you'd have to journal each month to income accounts so you didn't overstate gst. I'd keep track of it in a spreadsheet so I made sure I got it right
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LyndaC

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Hi

So that you can keep record of the event in Reckon One

In your chart of accounts open a Rent Deferral liability account as main account, (Current Liability) under this I would put each of the properties that I am doing a deferral for as a sub account.  This way I keep an accurate record of what is owed on each property. (Later the repayments would go against these loan accounts)

You would do invoice for full rent, giving them a 50% discount as per the rent waiver.  (This is the amount that is not going to be recouped at a later date.) 50% of the rent would be then owed.

You would do then do a credit adjustment note for the amount owed against the invoice with the expenses account to the liability account for the property, this is showing the debt raised. 

The Invoice payable would now show nil owed and the loan transaction would now showing in your accounts keeping accurate records for future reference.