NOTE 4 – OTHER ASSETS

Other Assets

Other Assets consisted of the following at September 30, 2017 and December 31, 2016:



	September 30, 2017		December 31, 2016

Derivative Asset	$	1,963	$	1,835
Deferred Financing Costs		2,483		1,383
Prepaid Expenses		9,336		9,217
Investment in Statutory Trusts		1,548		1,548
Investment in Non-Hotel Property and Inventories		3,307		2,641
Deposits with Unaffiliated Third Parties		4,581		3,332
Deferred Tax Asset, Net of Valuation Allowance of $804		14,616		16,197
Property Insurance Receivable		6,382		-
Other		1,891		3,217
	$	46,107	$	39,370

Derivative Asset – This category represents the Company’s gross asset fair value of interest rate swaps and interest rate caps. Any swaps and caps resulting in a liability to the Company are accounted for separately within Other Liabilities on the Balance Sheet.

Deferred Financing Costs – This category represents financing costs paid by the Company to establish our Line of Credit. These costs have been capitalized and will amortize to expense over the life of the Line of Credit.

Prepaid Expenses – Prepaid expenses include amounts paid for property tax, insurance and other expenditures that will be expensed in the next twelve months.

Investment in Statutory Trusts – We have an investment in the common stock of Hersha Statutory Trust I and Hersha Statutory Trust II. Our investment is accounted for under the equity method.

Deposits with Unaffiliated Third Parties – These deposits represent deposits made by the Company with unaffiliated third parties for items such as lease security deposits, utility deposits, and deposits with unaffiliated third party management companies.

Deferred Tax Asset – We have approximately $14,616 of net deferred tax assets as of September 30, 2017. We have considered various factors, including future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies in determining a valuation allowance for our deferred tax assets, and we believe that it is more likely than not that we will be able to realize the $14,616 of net deferred tax assets in the future.