Preserve reported results and record each proposed change once. A positive NOI adjustment can still have an equal cash use outside NOI, so the adjustment register should show both effects.
Keep the original operating statement intact. A normalization register should explain how the analysis moves away from it, including who accepts a change and where any related cash obligation is carried. Without that record, a rising NOI can conceal a cost that merely moved to another schedule.
The OCC discussion of income-generating capacity provides context for reviewing operating results and projections. This optional register does not prescribe accounting treatment or a lender’s accepted NOI. Every adjustment below is hypothetical.
Select a common analytical period
Identify the reported period and the period being underwritten. An insurance renewal for next year is not a correction to last year’s ledger. It is a forward adjustment that belongs in the bridge to the selected underwriting period.
Assign stable adjustment IDs and tie each to a source account. If an item affects both revenue and expenses, use separate linked rows so neither side disappears. A recovery increase without its related expense can create artificial cash flow.
Blank adjustment register
adjustment_id,account,period,signed_noi_change_usd,additional_cash_use_outside_noi_usd,cash_effect_usd,decision_status,evidence_ref,reason
A001,,,,,,proposed,,Field instructions and controls
| Field | Entry rule | Frequent error |
|---|---|---|
| signed_noi_change_usd | Positive increases NOI; negative decreases it | Mixing signed impacts with unsigned expense totals |
| additional_cash_use_outside_noi_usd | Positive amount still paid outside NOI | Removing a capital cost and forgetting its funding |
| cash_effect_usd | NOI change less the outside-NOI cash use | Reading a proposed effect as an accepted result |
| decision_status | Preserve proposed, accepted, rejected or unresolved | Labeling the preparer’s view as lender acceptance |
| evidence_ref / reason | Identify document, period and analytical basis | “One-time” with no supporting explanation |
The workbook calculates each row’s potential cash effect. It intentionally does not sum all rows into accepted NOI: an arithmetic total across rejected and accepted items would misrepresent the review. Filter by the explicit decision status and preserve the reviewer record separately.
Completed hypothetical register
adjustment_id,account,period,signed_noi_change_usd,additional_cash_use_outside_noi_usd,cash_effect_usd,decision_status,evidence_ref,reason
A001,Termination income,TTM September 2026,-24000,0,-24000,accepted_for_example,GL-1;SETTLEMENT-1,Remove nonrecurring income
A002,Insurance,Next underwriting year,-8000,0,-8000,accepted_for_example,POLICY-1;QUOTE-1,Supported renewal cost increase
A003,Roof replacement,Next underwriting year,30000,30000,0,accepted_for_example,INVOICE-1;CAPEX-1,Reclassify to capital cash budget; no cash saving
A004,Proposed rent increase,Next underwriting year,18000,0,18000,rejected_for_example,BROKER-EMAIL-1,Unsigned proposal; not included in accepted NOIBegin with $520,000 reported NOI. For this illustration, accept the $24,000 removal of termination income, the $8,000 insurance increase and the $30,000 roof reclassification. Accepted analytical NOI becomes $518,000: $520,000 − $24,000 − $8,000 + $30,000.
The roof still requires $30,000 outside NOI. Cash before financing and other capital items is therefore $488,000, not $518,000. The roof row’s zero incremental cash effect makes that reclassification visible.
The proposed $18,000 rent increase is rejected in this example because the submitted support is an unsigned proposal. Summing all adjustment rows would produce $536,000 NOI, overstating the accepted analytical figure by $18,000. This is a review-status error even though every addition is arithmetically correct.
Do not turn every repair into an add-back
The example assumes the roof treatment for demonstration; it does not classify actual work for tax, accounting or lending purposes. Determine the appropriate treatment from the scope, policies, documents and professional review. A recurring operating requirement cannot be removed merely because the owner dislikes its effect on NOI.
Likewise, a favorable rent step requires a supported commencement and expense treatment. Keep speculative leasing upside in a separate scenario until the intended underwriting basis permits it. Distinguish an assumption the sponsor believes from a term another party has accepted.
Record revisions without losing the decision
If a reviewer accepts a previously rejected change, preserve the evidence, date, reviewer identity and reason. Recalculate the accepted bridge and the related cash budget together. Changing status should never leave a capital offset or related revenue item behind.
At delivery, provide the original statement, the register, the accepted bridge and the unresolved list. A reader should be able to reproduce the result without treating every spreadsheet row as approved. The useful output is a traceable analytical position and a visible cash requirement.
Sources and evidence
- OCC — Commercial Real Estate LendingPrinted pages 42–43: Income-Generating Capacity of CRE · Checked 2026-10-21 · Handbook version 2.0 published March 2022. Supervisory context; the template and all example values are original optional working aids, not required lender forms.
Source dates and applicability matter. Report an error or a changed source.