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11th Edition of the Uniform System of Accounts for the Lodging Industry: How Will It Affect You?


12/9/14

Synopsis

Are you ready? After eight years, the American Hotel & Lodging Association has published the 11th Edition of the Uniform System of Accounts for the Lodging Industry (11th Edition). The updated and revised set of guidelines contains changes that are effective January 1, 2015. The 11th Edition presents many revisions that hotel owners, asset managers, management companies, and those who service the industry should assess. These modifications were made to stay current with changes in industry and accounting practices. Those who report to institutional owners and lenders will be required to present statements in the new format.

Issue

What are some of the important updates? While the 11th Edition includes many changes, here are a few of the significant updates to consider:

  • Reporting for Labor – Modifications include new report presentation for salaries and wages for management and non-management employees, and a separate line item for contracted, leased or outsourced labor.
  • Operating Departments – Changes to rooms revenue reporting (segment changes and added definitions), resort fees moved to miscellaneous income, change in definition to service charges, expansion of complimentary services and gifts into three departments, separate reporting guidelines for mixed ownership facilities (i.e. condo/hotels), and changes to reporting for telecommunication costs (no longer an other operated department).
  • Undistributed Departments – Information and telecommunication systems added as an undistributed department, elimination of the segregation of sales and marketing expenses, and other modified language and definition changes.
     

Other modifications were also made to non-operating income and expenses, financial ratio and operating metrics, account names, and report layouts.
 
What Does CohnReznick Think?
Making the necessary changes to conform to the 11th Edition will take time and resources. Consult with your financial advisor to understand the changes that need to be made and for assistance in making the necessary changes to your chart of accounts and internal reports. It is also recommended to review your existing (and future) management and franchise agreements.
 
Contact

For more information, please contact Dana English, manager, at dana.english@cohnreznick.com or 301-664-8174, Jason Fleetwood, partner, at jason.fleetwood@cohnreznick.com or 301-664-8196, or Greg Remeikis, partner, at greg.remeikis@cohnreznick.com 410-783-7422.
 
To learn more about CohnReznick’s Hospitality Industry Practice, visit our webpage.


This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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