What is the difference between FFO and Affo?

AFFO is a superior measure compared to FFO because the former considers the maintenance costs of the real estate property over its life. The value of AFFO is obtained by making adjustments to the FFO figure to deduct recurring expenditures required to keep the real estate property running and generating revenues.

What is Affo & how does it work?

FFO puts depreciation and other noncash charges back into the net income, giving a clearer view of the REIT's operating performance. AFFO takes this a step further by accounting for capital expenditures and other adjustments, providing a picture of the REIT's sustainable dividend-paying capacity.

How is Affo calculated?

The value of AFFO is obtained by making adjustments to the FFO figure to deduct recurring expenditures required to keep the real estate property running and generating revenues. Another adjustment made to the FFO figure is the straight-lining of rents, which distributes rent expenses over the life of the property.