AMORTIZATION AND DEPRECIATION. Amortization and depreciation are estimated to totalize $22.2MM in 2022, derived from historical Airport´s assets and new investments expected to be executed in 2022. However, it is important to highlight that since October 2021 onwards Budget includes a new amortization method based on traffic.
AMORTIZATION AND DEPRECIATION. The 1991 definition of FFO specified that depreciation and amortization were to be added back to net income, without specifying what amortized items are to be included. As a result, different capitalization policies among reporting REITs led to widely varying lists of items being "added back" in the calculation. In addition, some analysts questioned the propriety of adding back any depreciation other than depreciation of real estate, since the original justification for the add back was that historical cost depreciation is inappropriate for real estate assets. Their argument has been that depreciation of assets other than real estate is no less real when they are owned by a REIT than when they are owned by a company in another industry, and that there is therefore no reason to add back their depreciation in measuring the operating performance of a REIT. NAREIT AGREES THAT THE LOGIC UNDERLYING THE CONCEPT OF FFO IS INCONSISTENT WITH THE ADD BACK OF DEPRECIATION OR AMORTIZATION OF ASSETS OTHER THAN THOSE UNIQUELY SIGNIFICANT TO THE REAL ESTATE INDUSTRY. IT URGES ALL MEMBER COMPANIES REPORTING FFO TO ADD BACK ONLY THOSE ITEMS THAT MEET THIS STANDARD. Examples of items that should be added back include real property depreciation, amortization of capitalized leasing expenses, tenant allowances or improvements, and the like. Specifically excluded are the add back of items such as the amortization of deferred financing costs, depreciation of computer software, company office improvements, and other items commonly found in other industries and required to be recognized as expenses in the calculation of net income.
AMORTIZATION AND DEPRECIATION. Amortization and depreciation are estimated to totalize $30.4MM in 2023, it is important to highlight that method used is based on traffic.
