Updated about 3 years ago on . Most recent reply
Question about REITS and FFO
I am trying to understand the concepts of FFO and AFFO in REIT evaluation and am finding it to be a bit confusing. Quoting Investopedia....
"FFO is calculated by adding depreciation, amortization, and losses on sales of assets to earnings and then subtracting any gains on sales of assets and any interest income. It is sometimes quoted on a per-share basis."
Why would you add losses and and subtract gains when calculating the earnings of REITS or any other security, this seems kind of backwards doesn't it....? Can someone who understands these concepts please explain and help the rest of us to understand them as well.....?