THE NHP FOUNDATION AND ITS AFFILIATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED YEARS ENDED DECEMBER 31, 2019 and 2018
Tenant Accounts Receivable Tenant accounts receivables are reported net of an allowance for doubtful accounts or are charged to bad debt expense when they are determined to be uncollectible based upon a periodic review of the accounts by management. Management’s estimate of the allowance is based on historical collection experience and a review of the status of tenant accounts receivables. It is reasonably possible that management’s estimate of the allowance will change. Debt Issuance Costs Debt issuance costs, net of accumulated amortization, are reported as a direct deduction from the face amount of the mortgage notes payable to which such costs relate. Amortization of debt issuance costs is reported as a component of interest expense and is computed using an imputed interest rate on the related loan. Deferred Costs Deferred costs consist of tax credit fees and other intangible assets. The deferred costs are amortized over the estimated useful life using the straight-line method. Amortization expense as of December 31, 2019 and 2018 was $213,647 and $200,140, respectively. Estimated annual amortization expense for each of the ensuing years through December 31, 2024 and thereafter is as follows:
2020 2021 2022 2023 2024
$
175,411 175,411 175,411 170,246 164,610
Thereafter
1,751,111
$
2,612,200
Deferred Development Costs Costs incurred in the identification of potential developments are deferred. Deferred development costs are reimbursed upon the receipt of project financing for the related entity. Costs incurred on unlikely or abandoned developments are expensed when these determinations are made. Developer Fees Receivable NHPF has entered into various development agreements with the affiliated tax credit and real estate entities of which, NHPF and their related general partner/member entities serve as the general partner or managing member in these entities. The agreements provide for the fee to be paid from capital contributions and future cash flows of the respective entities. Developer fees receivable presented on the combining and consolidating statement of financial position represent developer fees due from related entities for development services. Developer fees receivable, developer fee income and deferred developer fee earned from affiliates and subsidiaries shall be paid by the related entities upon receipt of the limited partner equity contribution. Any remaining developer fee receivable, and accrued interest there in, if applicable, is payable from operational cash flow of the respective projects
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