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9. Investment in Direct Financing Leases

9 Months Ended

Jul. 31, 2012

9. Investment in Direct Financing Leases

During Fiscal 2011, the Companies leased the Jack Frost and Big Boulder ski areas to a third party under direct financing leases that extended through 2034.

The Companies net investment in direct financing leases consisted of the following as of October 31, 2011:

	10/31/11
Minimum future lease payments	$7,426,946
Unguaranteed residual value of lease properties	8,430,879
Gross investment in lease	15,857,825
Unearned income	(7,567,630)
Valuation allowance	(502,000)
Net investment in direct financing leases	$7,788,195

On December 15, 2011, the Jack Frost and Big Boulder ski areas were sold to the previous third party lessee. The transaction resulted in a loss of approximately ($502,000) primarily related to the reversal of the accrued rent receivable based on the straight line amortization of the lease. The valuation allowance was recorded as impairment in Fiscal 2011. The reported interest income in Fiscal 2011 primarily resulted from the direct financing lease.

- Definition

The entire disclosure for lessor's leasing arrangements, which includes direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease.

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