Company: GLPI
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0001575965-25-000008
Chunk: 169

Company: Gaming & Leisure Properties, Inc.
Filing Date: 2025-02-20
Form: 10-K
Item: Item 8
Chunk 169
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 lease, which is equal to the sum of the lease receivable and the unguaranteed residual asset, discounted at the rate implicit in the lease. Any difference between the fair value of the asset and the net investment in the lease is considered selling profit or loss and is either recognized at lease inception or the lease reassessment date or deferred and recognized over the life of the lease, depending on the classification of the lease. Since we purchase properties and simultaneously enter into new leases directly with the tenants, the net investment in the lease is generally equal to the purchase price of the asset, and, due to the long term nature of our leases, the land and building components of an investment generally have the same lease classification.The Company recognizes the related income from our financing receivables using an effective interest rate at a constant rate over the term of the applicable leases.  As a result, the cash payments received under financing receivables will not equal the income recognized for accounting purposes.  Rather, a portion of the cash rent the Company will receive is recorded as interest income with the remainder as a change to financing receivables.  Initial direct costs incurred in connection with entering into financing receivables are included in the balance of the financing receivables.  Such amounts will be recognized as a reduction to interest income from financing receivables over the term of the lease using the effective interest rate method.  Costs that would have been incurred regardless of whether the lease was signed, such as legal fees and certain other third party fees, are expensed as incurred.  The Company recognizes rental revenue from tenants, including rental abatements, lease incentives and contractually fixed increases attributable to operating leases, on a straight-line basis over the term of the related leases when collectability is reasonably assured in accordance with ASC 842. Additionally, percentage rent that is fixed and determinable at the lease inception date is recorded on a straight-line basis over the lease term, resulting in the recognition of deferred rental revenue on the Company’s Consolidated Balance Sheets. Deferred rental revenue is amortized to rental revenue on a straight-line basis 

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over the remainder of the lease term. The lease term includes the initial non-cancelable lease term and any reasonably assured renewable periods. Contingent rental income that is not fixed and determinable at lease inception is recognized only when the lessee achieves the specified target. Recognition of rental income commences when control of the facility has been transferred to the tenant. Additionally, in accordance with ASC 842, the