Renovation cost in P&L

[Nikolas Engel]

Oh boy, I am confused:

I was looking at a P&L statement of a 40+ unit MFH and noticed that seller did not include significant renovation costs to update units each year in the expense section. Those expenses were later subtracted from the NOI to show the final income.

Shouldn't those renovation costs for the replacement of all kinds of interior items appear in the expense section to come to a more accurate NOI? Or is this just usual practice to single out renovation costs - and why would that be acceptable?

Thank you in advance for sharing your experience!