Company: INRE
Filing Date: 2025-03-05
Form Type: 10-K
Source: 0000950170-25-033568
Chunk: 318

Company: Inland Real Estate Income Trust, Inc.
Filing Date: 2025-03-05
Form: 10-K
Item: Item 6
Chunk 318
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 judgments to be made as to the collectability of receivables. Collectability factors taken into consideration are the amounts outstanding, tenant’s financial condition, payment history and other economic conditions impacting the tenant. The Company includes both billed and accrued charges in its evaluation of the collectability of a tenant’s receivable balance. Changes in collectability occur when the Company no longer believes it is probable that substantially all the lease payments will be collected over the term of the lease. If collection is not probable, the lease payments are accounted for on a cash basis and revenue is recorded as cash is received. If reassessed, and the collection of substantially all of the lease payments from the tenant becomes probable, the accrual basis of revenue recognition is reestablished. The provision for estimated credit losses resulting from changes in the expected collectability of lease payments, including variable payments, is recognized as a direct adjustment to lease income, and a direct write-off of the operating lease receivables, including straight-line rent receivable.Capitalization and DepreciationReal estate properties held and used are recorded at cost less accumulated depreciation. Real estate properties held for sale are recorded at the lesser of their carrying value or fair value less selling costs. Improvement and betterment costs are capitalized, and ordinary repairs and maintenance are expensed as incurred.Real estate properties are classified as held for sale when the Company concludes that a sale is likely. Criteria that may be considered in this determination include obtaining a signed purchase and sale agreement, the completion and waiving of due diligence by the seller, and the receipt of non-refundable earnest money from the seller.Cost capitalization and the estimate of useful lives require judgment and include significant estimates that can and do change. Depreciation expense is computed using the straight-line method. The Company anticipates the estimated useful lives of its assets by class to be generally: 

          Building and other improvements
           
          30 years

          Site improvements
           
          5-15 years

          Furniture, fixtures and equipment
           
          5-15 years

          Tenant improvements
           
          Shorter of the life of the asset or the term of the related lease

          Leasing fees
           
          Term of the related lease
         
         Depreciation expense was $50,232, $46,837 and $43,331 for the years ended December 31, 2024, 2023 and 2022, respectively. Amortization of leasing fees were $1,239