2. Each accounting period, the hotel should calculate the FF&E amount as per the Hotel Management Agreement (usually a percentage of revenue) and then transfer the amount into a separate bank account. Funds to meet the FF&E contribution shall first be withdrawn from the operating account and to the extent of any shortfall, the Owner will pay the shortfall in accordance with the management agreement.
3. The funds in the FF &E account will be available to the Operator to meet expenditure on FF&E up to the amount budgeted in the Business Plan for the relevant fiscal year.
4. When an asset is purchased it is accounted for using the normal procedure for fixed asset acquisitions.