Financial Reporting Flashcards
7 cards from real ASC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Financial Reporting flashcards as text
In ARGUS, the 'Available Cash Flow' line on a cash flow report is best described as:
Answer: NOI minus capital expenditures and debt service
Available Cash Flow (also called cash-on-cash or equity cash flow) equals NOI less capital expenditures and debt service obligations.
Which ARGUS feature allows a user to model the impact of a single variable, such as market rent, across a range of values on IRR or value?
Answer: Sensitivity Analysis
Sensitivity Analysis in ARGUS tests how changes in a single input variable—like market rent or cap rate—affect key output metrics such as IRR.
When a lease has a 'Base Stop' recovery structure in ARGUS, what does the base stop amount represent?
Answer: The expense level above which the tenant reimburses the landlord
A base stop is the per-square-foot expense threshold; any operating expenses above this level are passed through to the tenant.
In ARGUS financial reports, 'Tenant Improvements' (TIs) are classified as:
Answer: Capital expenditures appearing below NOI
TIs are capital expenditures that appear below the NOI line, reducing cash flow available to investors but not included in NOI.
What does the 'Effective Gross Revenue' (EGR) line represent in an ARGUS cash flow report?
Answer: Potential gross revenue minus vacancy and credit loss
EGR equals Potential Gross Revenue (PGR) less vacancy and credit loss, representing revenue actually collected from tenants.
In ARGUS, a 'Free Rent' period entered on a lease will appear in financial reports as:
Answer: Zero rent revenue during those periods, reducing scheduled base rent
Free rent means no cash rent is collected during those months, so scheduled base rent shows zero for that period in the cash flow.
The 'Unleveraged IRR' in an ARGUS report differs from 'Leveraged IRR' because it:
Answer: Ignores the effect of debt financing on returns to equity
Unleveraged (unlevered) IRR measures property-level return on total investment without the amplifying or diluting effects of debt financing.