NetLease - Establish The Amortization Schedule

Overview

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, ROU Asset, Lease Liability, Amortization/Expense, 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 can take up to 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 Financing Schedule sublist on the Amortization Schedules subtab

  • Note that the Period 0 line establishes the ROU Asset and Lease Liability at the commencement date; any net differences at commencement are due to Lease Incentives, Initial Direct Costs, or Prepaid Lease Payments input on the header
  • Periods 1-### correspond to subsequent month activity, which includes the following, depending on lease type
    1. Financing (All IFRS) > Payments, ROU Amortization, Lease Liability Accretion, and Interest Expense
    2. Operating (US Only) > Payments, Single Lease Expense, Lease Liability Accretion, and ROU Adjustments
    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 


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