Leases
IFRS 16 and ASC 842 give different answers for the same lease, and a group reporting both needs both. The classification is applied rather than typed.
Where to find it
- Module: Accounting
- Group: Recognition
- Section: Leases
- Screen: Leases
Address in the console: /accounting/leases
List · 13 columns · 59 fields on its form · 6 of them required · 4 actions
What the list shows
These are the columns of the list, in the order they are drawn. Any of them can be sorted on, filtered on, hidden, or exported.
| Column | Kind | Field name |
|---|---|---|
| Lease | Code | lease_no |
| Name | Text | name |
| Role | Status | role |
| Type | Status | lease_type |
| Classification | Status | classification |
| Property | Text | property_name |
| Commenced | Date | commencement_date |
| Ends | Date | end_date |
| Payment | Amount | payment_amount |
| Liability | Amount | current_liability |
| ROU asset | Amount | current_rou_asset |
| Notice due | Yes or no | notice_due |
| Status | Status | status |
The form
What is asked for when a record is created here. Required fields are marked; a choice drawn from a configuration list is one an administrator can extend without a release.
| Field | Type | Choices | Notes |
|---|---|---|---|
| Name required | Text | ||
| We are the required | Choice | lessee, lessor, sublessor, intercompany | |
| Asset type | Choice | Configuration list | |
| Classification | Choice | Configuration list | Use the Classify action rather than typing this: the answer depends on the principle and five criteria. |
| Ownership transfers at the end | Yes or no | ||
| Purchase option reasonably certain | Yes or no | ||
| Term is a major part of the asset’s life | Yes or no | ||
| PV is substantially all of fair value | Yes or no | ||
| Specialised asset with no alternative use | Yes or no | ||
| Short term (12 months or less) | Yes or no | ||
| Low value | Yes or no | ||
| Landlord / lessor (supplier) | Choice | Looked up from existing records | |
| Tenant (customer) | Choice | Looked up from existing records | |
| Group company (intercompany lease) | Choice | Looked up from existing records | |
| Counterparty name | Text | ||
| Property | Choice | Looked up from existing records | |
| Rental unit | Choice | Looked up from existing records | |
| Head lease (for a sublease) | Choice | Looked up from existing records | |
| Signed on | Date | ||
| Commences required | Date | When the asset becomes available for use — NOT the signature date, and the two are commonly months apart. | |
| Ends | Date | ||
| Term (months) required | Number | ||
| Renewal option (months) | Number | ||
| Renewal reasonably certain | Yes or no | An option is part of the term when its exercise is reasonably certain, and not when it is not. | |
| Termination option | Date | ||
| Termination penalty | Number | ||
| Notice period (days) | Number | ||
| Currency | Choice | Looked up from existing records | |
| Payment required | Number | ||
| Frequency | Choice | monthly, quarterly, semi_annual, annual, weekly, one_off | |
| Paid | Choice | advance, arrears | An annuity due is worth more than an ordinary annuity by one period’s discount — about 2% on a five-year lease. |
| First payment | Date | ||
| Escalation | Choice | none, fixed_pct, fixed_amount, index, market_review, stepped | Fixed escalations enter the liability; index-linked ones do not and are picked up by a remeasurement. |
| Escalation % | Number | ||
| Escalation amount | Number | ||
| Escalates every (months) | Number | ||
| Index | Text | ||
| Index base value | Number | ||
| Variable payment basis | Text | Turnover or usage payments are expensed as incurred and never enter the liability. | |
| Discount rate % required | Number | ||
| Rate basis | Choice | implicit, incremental_borrowing, group_rate, risk_free | |
| Initial direct costs | Number | ||
| Incentives received | Number | ||
| Prepaid | Number | ||
| Restoration provision | Number | ||
| Security deposit | Number | ||
| Residual value guarantee | Number | ||
| Purchase option price | Number | ||
| Accounting principle | Choice | Looked up from existing records | |
| Ledger | Choice | Looked up from existing records | |
| Right-of-use asset account | Choice | Looked up from existing records | |
| Lease liability account | Choice | Looked up from existing records | |
| Interest account | Choice | Looked up from existing records | |
| Depreciation account | Choice | Looked up from existing records | |
| Rent expense account | Choice | Looked up from existing records | |
| Cost center | Choice | Looked up from existing records | |
| Contract reference | Text | ||
| Document | Text | ||
| Notes | Long text |
What you can do here
What if
What a lease would do to the balance sheet before it is signed. Stores nothing.
Asks for: Payment* Term (months)* Discount rate % Frequency Paid Escalation % Initial direct costs Incentives Profile
Classify
The five criteria applied, and the answer under every principle the company keeps.
Commence primary
Measure the liability and the right-of-use asset, and build the amortisation schedule.
Asks for confirmation: Commence this lease and post the right-of-use asset and liability?
Remeasure
The liability is recalculated and the DIFFERENCE adjusts the asset — except on a reduction in scope.
Asks for: Event* Effective from* New payment New term (months) New discount rate % Scope reduction % Reason*
* required
The rules that apply here
Everything on this screen obeys the platform rules rather than rules of its own. The ones worth knowing before you use it:
- Narrowing a list — search, conditions, sort, totals, export and saved views.
- What may be changed — the five grounds a record may not be edited on.
- Companies and business units — what the switcher above this list is doing to it.
- Creating a record — required fields, where choices come from, and how the number is allocated.
- Importing a spreadsheet — this screen accepts one, and it runs through the same rules as typing.