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 'Debt Service Coverage Ratio' (DSCR) is calculated as:
Answer: NOI divided by annual debt service (principal + interest)
DSCR equals NOI divided by annual debt service; lenders use this ratio to ensure property income sufficiently covers mortgage payments.
Which ARGUS report would a property manager most likely use to reconcile actual expense recoveries billed to tenants?
Answer: Recovery detail report showing per-tenant calculation by expense pool
The Recovery detail report breaks down each tenant's reimbursement obligation by expense pool, enabling reconciliation against actual billings.
When ARGUS reports show 'Vacancy & Credit Loss' as a separate line from 'Absorption & Turnover Vacancy,' the primary distinction is:
Answer: Vacancy & Credit Loss is a general market-rate reserve; Absorption & Turnover is tenant-specific downtime
Vacancy & Credit Loss is a portfolio-level reserve for market and credit risk, while Absorption & Turnover captures the specific downtime for individual lease rollover events.
In ARGUS Enterprise, if a user wants to model a property under two different rent growth scenarios simultaneously, the correct tool is:
Answer: The Scenario Manager, creating separate scenarios for each assumption set
The Scenario Manager allows multiple complete assumption sets to be saved, run, and compared within a single ARGUS file.
What does 'Potential Gross Revenue' (PGR) represent in an ARGUS cash flow report?
Answer: Total revenue if the property were 100% occupied at contract and market rents with no concessions
PGR represents the maximum possible revenue—all spaces leased at contracted or market rates—before any vacancy, credit loss, or concession deductions.
In ARGUS, the 'Expense Growth Rate' assumption primarily affects which section of the financial report?
Answer: Operating expenses, causing them to escalate over the holding period
The Expense Growth Rate is applied to operating expenses each year, projecting how costs like taxes, insurance, and utilities will increase over time.
In ARGUS Enterprise, a 'Gross Lease' structure differs from a 'Net Lease' structure in financial reporting because:
Answer: Under a gross lease, the landlord pays operating expenses and does not show recovery income, while a net lease passes expenses to tenants as recovery revenue
In a gross lease, the landlord bears operating expenses with no recovery line; in a net lease, expenses are passed through and appear as both expense and recovery revenue.