FINANCIAL RESULTS
Albanese Cormier Holdings, LLC and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years ended December 31, 2025 and 2024 Summary of Significant Accounting Policies, continued Consolidation of Variable Interest Entities
1.
A company that holds variable interests in an entity is required to consolidate the entity if the company’s interest in the variable interest entity (VIE) is such that the company has the power to direct the VIE’s most significant activities and the obligation to absorb losses if they occur. In such cases, the company is the primary beneficiary of the VIE. Edison Plaza Partners, LLC was identified as a VIE and Albanese Cormier Holdings, LLC was identified as the primary beneficiary of Edison Plaza Partners, LLC. As a result, Edison Plaza Partners, LLC was consolidated during fiscal year 2011. See Note 2 for additional information. Fiscal Year The Company maintains a calendar year for both financial reporting purposes and federal tax reporting. Lease Revenue Receivable In accordance with industry standards, lease payments are due in advance on a monthly basis. As of December 31, 2025 and 2024 there were $2,696,488 and $1,713,031 in lease prepayments, respectively. Additionally, these financial statements include provisions for lease payments in arrears that total $0 and $8,956 at December 31, 2025 and 2024. Revenue Recognition Income from the Company’s operating leases, which include scheduled increases over the lease term, is recognized on a straight-line basis. For the years ended December 31, 2025 and 2024, income recognized on a straight-line basis is more than income that would have accrued in accordance with the lease term by $111,398 and $(396,714). At December 31, 2025 and 2024, receivables which resulted from recognizing income on a straight-line basis totaled $4,494,668 and $4,383,270. Revenue based on a percentage of tenants’ sales is recognized only after the tenant exceeds its sales breakpoint. The Company’s review is derived from lease contracts. Leases are excluded from ACS Topic 606, Revenues from Contracts with Customers. Effective January 1, 2022, the Company adopted ASC Topic 842, Leases, the Company will continue to recognize rental income on a straight-line basis and record a receivable for the difference between the base rent due per the lease agreements and the calculated straight-line rent amount. Additionally, the Company elected the practical expedient allowing lessors to combine lease and non-lease components if certain conditions are met. The non-lease components include tenant reimbursements for common area and certain operating expenses (escalation income) as defined in the lease agreements. The timing and pattern of the tenant reimbursements follows that of the monthly base rent payments remitted by the tenants.
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