FASB later rescinded EITF 98-9, following an outcry from a number of REITs, who complained that not reporting this revenue throughout the year would unnecessarily confuse their investors and others who track their financial results. Those REITs, accordingly, restored their financial statements to the status quo ante through a series of adjustments later in the year. It seemed the issue was dead. Effects of SAB 101 on Hotel REIT FFO Without adding back deferred contingent rent, most hotel REITs would have reported very little FFO, if any, in the first quarter. Boykin Lodging Co. BOY 260.2 NA 10,203 NA NA Will adopt SAB 101 in second quarter 2000.
Dollar amounts in thousands unless noted.
The rulings do not require that companies restate their 1999 financial statements to reflect the change, although several that have implemented the rulings in the first quarter have gone ahead and done so in the interest of comparability. In any event, it appears certain that SAB 101 will stand and that REITs will now have to live with the awkward effects the ruling produces on their reported net income. This tradition continues. Of the 15 publicly traded hotel REITs, eight have begun adding deferred rent to net income in order to reflect in FFO the cash flows they receive through the year. On the other hand, the hotel REITs who are including deferred rent in their FFO are doing so in the name of consistency.