Summary of Significant Accounting Policies (Notes)

6 Months Ended

Jun. 30, 2012

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements of Wells VAF I have been prepared in accordance with the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X, and in accordance with such rules and regulations, do not include all of the information and footnotes required by U.S. generally accepted accounting principles ("GAAP") for complete financial statements. In the opinion of WIM, Wells VAF I's manager, the statements for the unaudited interim periods presented include all adjustments that are of a normal and recurring nature and necessary to fairly and consistently present the results for these periods. Results for interim periods are not necessarily indicative of full-year results. For further information, refer to the financial statements and footnotes included in Wells VAF I's Annual Report on Form 10-K for the year ended December 31, 2011.

Intangible Assets and Liabilities Arising from In-Place Leases where Wells VAF I is the Lessor

As of June 30, 2012 and December 31, 2011, Wells VAF I had the following gross intangible in-place lease assets and liabilities:

	As of June 30, 2012
	Intangible Lease Assets						Intangible Lease Origination Costs			Intangible Below-Market In-Place Lease Liabilities
	Above-Market In-Place Lease Assets			Absorption Period Costs
Gross	$	357,971		$	2,934,382		$	2,619,309		$	386,472
Accumulated Amortization	(212,931		)	(2,039,338		)	(1,918,981		)	(268,356		)
Net	$	145,040		$	895,044		$	700,328		$	118,116

	As of December 31, 2011
	Intangible Lease Assets						Intangible Lease Origination Costs			Intangible Below-Market In-Place Lease Liabilities
	Above-Market In-Place Lease Assets			Absorption Period Costs
Gross	$	357,971		$	2,934,382		$	2,619,309		$	386,472
Accumulated Amortization	(194,417		)	(1,826,911		)	(1,723,048		)	(241,923		)
Net	$	163,554		$	1,107,471		$	896,261		$	144,549

During the three months ended June 30, 2012 and 2011, Wells VAF I recognized the following amortization of acquired intangible lease assets and liabilities:

	Intangible Lease Assets				Intangible Lease Origination Costs		Intangible Below-Market In-Place Lease Liabilities
For the three months ended June 30:	Above-Market In-Place Lease Assets		Absorption Period  Costs
2012	$	9,258	$	106,212	$	97,967	$	13,217
2011	$	9,258	$	106,213	$	97,967	$	13,216

During the six months ended June 30, 2012 and 2011, Wells VAF I recognized the following amortization of acquired intangible lease assets and liabilities:

	Intangible Lease Assets		Intangible Lease Origination Costs	Intangible Below-Market In-Place Lease Liabilities
For the six months ended June 30:	Above-Market In-Place Lease Assets	Absorption Period  Costs
2012	18,516	212,425	195,933	26,433
2011	18,516	212,425	195,933	26,433

The remaining net intangible assets and liabilities balances as of June 30, 2012 will be amortized as follows:

	Intangible Lease Assets				Intangible Lease Origination Costs		Intangible Below-Market In-Place Lease Liabilities
For the year ending December 31,	Above-Market In-Place Lease Assets		Absorption Period Costs
2012	$	18.516	$	212.425	$	195.933	$	26.433
2013	37.032		269.233		229.612		35.573
2014	37.032		158.067		113.705		23.218
2015	37.032		158.067		113.705		23.218
2016	15.428		81.558		47.373		9.674
2017	—		15.694		—		—
	$	145,040	$	895,044	$	700,328	$	118,116
Weighted-Average Amortization Period	4 years		3 years		2 years		3 years

Fair Value Measurements

Wells VAF I estimates the fair value of its assets and liabilities (where currently required under GAAP) consistent with the provisions of the accounting standard for fair value measurements and disclosures. Under this standard, fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. While various techniques and assumptions can be used to estimate fair value depending on the nature of the asset or liability, the accounting standard for fair value measurements and disclosures provides the following fair value technique parameters and hierarchy, depending upon availability:

Level 1 - Assets or liabilities for which the identical term is traded on an active exchange, such as publicly traded instruments or futures contracts.

Level 2 - Assets and liabilities valued based on observable market data for similar instruments.

Level 3 - Assets or liabilities for which significant valuation assumptions are not readily observable in the market. Such assets or liabilities are valued based on the best available data, some of which may be internally developed. Significant assumptions may include risk premiums that a market participant would require.

Wells VAF I applies the provisions of the accounting standard for fair value measurements and disclosures to the estimations of

fair value of its debt instruments. The fair value of Wells VAF I's debt instruments as of December 31, 2011, classified under Level 2, was estimated based on discounted cash flow analyses using the current market borrowing rates for similar types of borrowing arrangements as of the respective reporting date.

Other Assets

Other assets are comprised of (i) certain escrow accounts restricted by the lender to fund future real estate taxes and (ii) prepaid taxes, prepaid insurance, and nontenant receivables. Prepaid expenses and other assets will be expensed as incurred. Management assesses the collectability of other assets on an ongoing basis and provides for allowances as such balances, or portions thereof, become uncollectible. No such allowances have been recorded as of June 30, 2012 and December 31, 2011.

Income Taxes

Wells VAF I is not subject to federal or state income taxes; therefore, none have been provided for in the accompanying financial statements. The members are required to include their respective shares of profits and losses in their individual income tax returns, regardless of whether any cash distributions were made during the respective period.

Allocation of Profits and Losses

Wells VAF I allocates profits or losses for each allocation period to the investor members in proportion to their respective percentage interests in an amount not to create a deficit capital balance.

Distribution of Net Cash Flow

Net cash flow, as defined in the operating agreement, is distributed to the members in the order and priority that follows:

• First, to pay the following returns on capital:

• First, to the investor members up to a 10% per annum compounded return on their capital contributions during the offering period;

• Second, to the investor members in proportion to their percentage interests, as defined, until each investor member receives a 10% per annum compounded return on their capital contributions for the period following the offering period;

• Third, to Wells Management up to a 10% per annum compounded return on its capital contribution;

• Second, to the investor members in proportion to their percentage interests until each investor member has received $1,000 per share;

• Third, to Wells Management until it has received its capital contribution; and

• Fourth,

• To Wells Management in the amount of 20% of all distributable proceeds, less any disposition fees previously paid to Wells Management, of which Wells Management has agreed to pay up to 50% of any such amount received to broker/dealers who participated in its private placement offering; and

• The remainder to the investor members in accordance with their percentage interests.

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update 2011-04, Fair Value Measurement Topic Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS ("ASU 2011-04"). ASU 2011-04 converges the GAAP and International Financial Reporting Standards definition of "fair value," the requirements for measuring amounts at fair value, and disclosures about these measurements. The update does not require additional fair value measurements and is not intended to establish valuation standards or affect valuation practices outside of financial reporting. The adoption of ASU 2011-04 was effective for Wells VAF I for the interim period beginning January 1, 2012. The adoption of ASU 2011-04 has not had a material impact on Wells VAF I's financial statements or disclosures.

In June 2011, the FASB issued Accounting Standards Update 2011-05, Comprehensive Income Topic Presentation of Comprehensive Income ("ASU 2011-05"). ASU 2011-05 gives an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. The adoption of ASU 2011-05 was effective for Wells VAF I for the interim period beginning January 1, 2012, except for the specific requirement to present items that are reclassified from other comprehensive income to net income alongside their respective components of net income and other comprehensive income that has been deferred. The adoption of ASU 2011-05 has not had a material impact on Wells VAF I's financial statements or disclosures.