NetLessor - Establish The Amortization Schedule

Use Case: Once initial information related to a lease is saved and a lease record is created, the lease amortization schedule can be generated, which highlights what future balances and activity is expected to record as lease payments, NIV in Lease, Lease Receivable, Amortization/Revenue, etc.

Prerequisite: Ensure that all variable payments are entered and that the lease terms reflect the likelihood of exercising any options.

NOTE: A lease table can be re-generated multiple times and is NOT locked until journal entries have been recorded against the table. Once recorded, adjustments can only be made via modification or termination.

STEP BY STEP PROCESS

  • After saving required data for a lease record, select the Generate Schedule button at the top of the lease record to initiate the generation of the lease schedule for that record
  • Once clicked, the Generate Lease Schedule script will typically take well under a minute to generate the lease schedules. 
  • While the schedules are being generated, the Processing Status indicator on the lease header will highlight “Processing Amortization Schedules…”                 
  • Refresh the page until the Processing Status is blank again, indicating that the schedule generation is complete 
  • To review the lease schedule, navigate to the lease Operating, Sales Type or Direct Financing Schedule depending on the classification of your lease on the Amortization Schedules subtab

  • Note that the Period 0 line establishes the Net Investment in Lease at the commencement date; on the header
  • Periods 1-### correspond to subsequent month activity, which includes the following, depending on lease type
    1. Direct Financing and Sales Type Leases  (All IFRS) > Payments, Interest Income, Residual Values, NIL Lease Receivables, and Net Investment in Lease
    2. Operating (US Only) > Payments, Lease Income, Deferred Rent Liability, and Direct Cost
    3. Note that all monthly periods have activity, even if no payment is made in that month
  • An Operating Lease (US GAAP only) schedule is highlighted below

  • A Direct Financing Lease (ALL IFRS) schedule is highlighted below
Was this article helpful?