Use proof for CAM in QoE
Do not book a CAM finding as value.
Start with the recorded charge. Then use six evidence states.
Only the QoE team decides EBITDA treatment. The lease reviewer supplies source proof.
Baker Tilly says earnings reviews test one-time costs. It covers adjusted or normal cash flow.
The CAM proof ladder adds lease evidence. The QoE lead still owns the final view.
Start with the booked charge
The booked charge is the first state. It is an amount in company records.
Match it to the CAM statement. Then match the statement to the lease.
Record these source points:
- Legal tenant name
- Property name
- Statement year
- Booked account
- Booked amount
- Payment status
- Lease version
- CAM statement source
A booked charge is not an error. It is the starting record.
If the books and statement differ, stop. The accounting team must explain the gap.
Build the evidence ladder
Use six states for each CAM issue.
| State | What is known | Allowed treatment |
|---|---|---|
| Booked charge | The company recorded an expense | Keep the recorded amount |
| Supported finding | Lease proof and math flag an item | List the issue separately |
| Approved claim | The company approved a dispute | Do not assume a credit |
| Landlord response | The landlord answered the claim | Record the answer only |
| Booked credit | The company recorded supported credit | Send it to accounting review |
| Run rate decision | QoE approved future treatment | Use only the approved view |
Each state needs dated support. Do not skip a state because talks look good.
An approved claim is still a claim. A landlord response is still a response.
Neither state proves booked value. The company records decide that point.
Prove the supported finding
A supported finding needs two source paths.
The first path is contractual. It cites the signed lease term.
The second path is financial. It cites the billed line and math.
Deloitte uses similar source tracing. Its guide tests real estate deal records.
That artifact is owner side work. It is not tenant company QoE guidance.
Use its evidence discipline only. Do not copy its deal conclusions.
For each finding, keep:
- Lease clause citation
- Statement line citation
- Calculation method
- Finding amount
- Open assumption
- Reviewer name
- Review date
- Claim status
If one source path is missing, stop.
Label the item needs support.
Keep roles separate
CAM review cannot decide accounting treatment.
Venable keeps finance and property review apart. Its 2026 guide keeps legal review apart too.
Use the same role split here.
| Decision | Owner |
|---|---|
| Lease term meaning | Counsel |
| CAM finding support | Lease cost reviewer |
| Claim approval | Company and counsel |
| Credit recording | Accounting team |
| EBITDA treatment | QoE team |
| Deal model use | Deal lead |
One person may hold two roles. The decisions should still stay separate.
That makes the trail easier to test. It also shows where judgment entered.
Use a separate what-if view
An open item belongs outside booked value.
Show it as a separate what-if view. State each assumption beside it.
Do not call the amount an add back. Do not call it a recovery.
The sensitivity should say:
- Which charge was tested
- Which finding is supported
- Which proof is missing
- Whether the landlord replied
- Credit entry in the books
- Who decides the next state
This format gives the deal team context. It does not force an accounting result.
Walk one QoE example
This QoE example is fictional. Every amount and company fact is made up.
The company booked $12,000 of annual CAM. The statement matches the company record.
The lease reviewer flags a $2,000 item. The reviewer cites the clause and billed line.
The company approves a dispute. The landlord has not replied.
No credit appears in the books. The company received no cash.
The base view keeps the $12,000 expense. It books no CAM change.
A separate view shows a $2,000 what-if amount. It labels the claim as open.
The QoE team decides whether to show it. The deal lead decides model use.
The books include no $2,000 value. No source proves that result.
Review recurring treatment
A booked credit may still be one time.
Ask what period the credit covers. Then ask whether the billed issue may recur.
Do not assume future charges will fall. Do not assume a past credit repeats.
The QoE team should test:
- The covered lease year
- The credit record
- Any landlord terms
- The source of the billing issue
- The expected future lease charge
- Company leaders' proof for their view
The CAM reviewer can explain the finding. The reviewer should not set run rate.
Hand off the issue ledger
Use one row for each issue.
| Field | Entry |
|---|---|
| Location and year | |
| Booked charge | |
| Supported finding | |
| Lease citation | |
| Statement citation | |
| Claim approval | |
| Landlord response | |
| Booked credit | |
| Current evidence state | |
| QoE decision | |
| Decision owner |
The issue ledger is your working record. Its evidence state shows what changed.
Keep prior proof in the deal file. The decision owner shows who acts next.
Pull missing records from the seller data room guide. Select review files with the multisite screen. Set paid scope in the M&A service guide.
See other firm paths at Practice Growth.
The deal advisor page maps this offer. Find other deal jobs in the transaction advisor hub.
Where CAMAudit fits
Deal advisors can tie this step to the proof ledger.
Your firm selects the matched source packet. CAMAudit reads its lease and CAM files.
A math check may flag a billed item. Source lines stay with that flag.
CAMAudit can build a branded CAM audit for reviewed findings. Your firm reviews and signs each approved audit.
The issue ledger then points to the QoE lead. That lead alone makes the earnings decision.
If your firm approves a claim, CAMAudit may draft it. The output is a dispute letter draft.
It is not legal advice. Have counsel review before sending.
Add this proof lane with the service line guide.
Ready to add this work to your firm? Get started.
Sources
- Baker Tilly guide, 2023-07-18, updated 2025-03-12
- Deloitte real estate diligence artifact
- Venable transaction diligence guide