Understanding Expense Participation Information

Use the E.P. Information program (P15012) to define the parameters that the system uses to calculate the tenant's share of expenses for each expense class in which the tenant participates. You set up expense participation information by lease and expense class. If a lease pertains to multiple units, you must set up expense participation information for each unit and expense class separately.

Use the expense participation calculation to calculate the tenant's expense share: amount of expenses × (tenant's area ÷ building or property area) = tenant's expense share.

This table describes the values in the expense participation calculation:

Values	Description
Expense class	The system retrieves the expense class, which contains the account information necessary to derive the total expense amount for a specific period of time.
Tenant's area (numerator)	The system retrieves the tenant's area from the area on the lease, which you can override if necessary.
Building or property area (denominator)	The system retrieves or calculates the area of the building based on the computation method that you specify: If the computation method is B, the system retrieves the area for the building from the building log record that is assigned the same E.P. code that you specify on the expense participation information record. If you do not have a building log record set up for an area E.P. code, you cannot use this computation method. If the computation method is X, the system uses the average occupied space for the building (also known as a gross-up factor). The system sums the rentable square footage of all the units in the building and calculates the number of days that each unit is occupied (based on the billing period used in the expense participation calculation). Then, the system multiplies the area by the number of days occupied and divides that result by the number of days in the billing period. Use the corresponding computation methods P and Y, respectively, to compute property area values, instead of building area values.

Values

Description

Expense class

The system retrieves the expense class, which contains the account information necessary to derive the total expense amount for a specific period of time.

Tenant's area (numerator)

The system retrieves the tenant's area from the area on the lease, which you can override if necessary.

Building or property area (denominator)

The system retrieves or calculates the area of the building based on the computation method that you specify:

If the computation method is B, the system retrieves the area for the building from the building log record that is assigned the same E.P. code that you specify on the expense participation information record.
If you do not have a building log record set up for an area E.P. code, you cannot use this computation method.
If the computation method is X, the system uses the average occupied space for the building (also known as a gross-up factor).
The system sums the rentable square footage of all the units in the building and calculates the number of days that each unit is occupied (based on the billing period used in the expense participation calculation). Then, the system multiplies the area by the number of days occupied and divides that result by the number of days in the billing period.

Use the corresponding computation methods P and Y, respectively, to compute property area values, instead of building area values.

In addition to the basic setup information, you can specify adjustments to the expense class, limits, and other rules for calculating the denominator (area of the building or property) by excluding units.