NetLease - Supplemental cash flow information
Overview
The Supplemental Cash Flow Information report summarizes lease cash flows and noncash ROU asset additions for a period. It produces the figures for the supplemental cash flow table in the lease footnote under ASC 842-20-50-4(g)(1)-(2): cash paid for amounts included in the measurement of lease liabilities, and ROU assets obtained in exchange for lease liabilities, segregated between Operating and Financing leases. Each line can be drilled down by lease and then to the individual subledger (schedule line) amounts behind it, so every figure in the footnote can be traced to source.
The report presents the following lines:
| Line | What it includes |
|---|---|
| Operating Cash Flows Paid for Operating Leases | Lease payments on leases classified as Operating |
| Operating Cash Flows Paid for Interest Portion of Financing Leases | Interest portion of payments on leases classified as Financing |
| Financing Cash Flows Paid for Principal Portion of Financing Leases | Principal portion of payments on leases classified as Financing |
| ROU Assets Obtained On Operating Lease Commencements | ROU asset recognized at commencement on Operating leases |
| ROU Assets Obtained On Operating Lease Term Modifications | ROU asset adjustments from Standard, Complete, Scope Decrease, Renewal and True Up modifications on Operating leases |
| ROU Assets Obtained On Operating Lease Impairments | ROU asset adjustments from ROU impairment modifications on Operating leases |
| ROU Assets Obtained On Financing Lease Commencements | ROU asset recognized at commencement on Financing leases |
| ROU Assets Obtained On Financing Lease Term Modifications | ROU asset adjustments from Standard, Complete, Scope Decrease, Renewal and True Up modifications on Financing leases |
| ROU Assets Obtained On Financing Lease Impairments | ROU asset adjustments from ROU impairment modifications on Financing leases |
Report details
| Report type | Scripted report (runs in the NetLease report engine, not a saved search) |
| Category | Disclosure reports |
| Data source | NetLease subledger (lease schedule lines) - activity for the period |
| Standard | ASC 842-20-50-4(g)(1)-(2); cash flow classification under ASC 842-20-45 |
| Can be scheduled | Yes - see NetLease - Scheduled Scripted Reports |
When to use this report
- Quarter-end and year-end reporting - to populate the supplemental cash flow table in the financial statement footnotes.
- Statement of cash flows preparation - to split lease payments between operating cash flows (operating lease payments and finance lease interest) and financing cash flows (finance lease principal).
- Audit requests - when auditors ask for support for cash paid on leases or for new ROU assets obtained in the period, with lease-level detail.
- Noncash disclosure - to identify ROU assets obtained from new leases and modifications during the period.
Prerequisites
- A role with access to NetLease reports (the NetLease Report record).
- Leases are classified (Operating or Financing) and their schedules are generated for the reporting period.
Running the report
- Navigate to NetLease > Reports > Disclosure Reports > Supplemental Cash Flow Information > Run.
- Set the filters (see below). Set the accounting period to the period being reported.
- Click Preview to view the results, or Export to download them to Excel or CSV depending on the excel format selected.
| Filter | Description |
|---|---|
| Subsidiary | Limits results to leases for the selected subsidiary. |
| Consolidation Subsidiary | Subsidiary to consolidate the results as. This drives FX conversion to that subsidiary's base currency. Multi-currency accounts only. |
| Currency | Currency to display the report in. |
| Consolidated Exchange Rate | Rate type used to translate results: Average, Current, Historical, Custom or None. Accounts that are not OneWorld see Current (To Date), Historical (From Date), Custom or None. See FX implications below. |
| Consolidation Date | Date to pull the exchange rate from when Custom is selected. |
| Export Level | Level of detail in the export: one option per grouping level of the report (for example the disclosure line, lease and subledger detail), or Full Hierarchy (all levels). |
| Department / Class / Location | Limits results to leases with the selected segment values. Multi-select. |
| Lease | Limits results to a single lease. |
| Accounting Period | Period to report on. Quarter and year periods total the activity across the whole period. |
| From Date / To Date | Alternative to the accounting period, for a custom date range. |
| Accounting Book | Multi-book accounts only. Reports the selected book, using each lease's secondary classification when the secondary book is selected. |
| Show Non-Book Specific Transactions | Multi-book accounts only. Available once an accounting book is selected. |
| Hide Currency Symbol | Removes currency symbols from the output. |
| Show FX Calculations | Shows amounts in lease, subsidiary and consolidated currency, with the exchange rates used. Multi-currency accounts only. |
Recommended Approach
Filter the accounting period to reflect the current reporting period.
Show FX Calculations Filter
This checkbox enables users to view lease balances in the lease currency, subsidiary currency, and consolidated currency. It also displays the exchange rates used to calculate these balances.
This option is useful for viewing and reconciling balances for leases that have undergone remeasurement or have been consolidated into a different subsidiary currency.
Results
The report shows each cash flow and ROU asset line with its total for the period. Expand a line to see the amount by lease, then expand a lease to see the subledger lines behind it. Click Export to save the report as an Excel file.
FX implications
If you have leases in different currencies, it can be helpful to see the rate implications by lease. Check Show FX Calculations in the filter section to show the additional columns associated with FX rate conversions.
The report adds columns for the lease to subsidiary rate conversion (when the contract currency, the currency on the lease, is different from the subsidiary currency) and columns for converting the subsidiary currency to the consolidated currency (the consolidation subsidiary selected in the filters).
| Column | Description |
|---|---|
| Amount (Contract) | Amount in the lease's contract currency |
| Contract Currency | The lease's contract currency |
| FX Rate | Rate used to convert from contract currency to subsidiary currency |
| Amount (Subsidiary) | Amount in the subsidiary's base currency |
| Subsidiary Currency | The subsidiary's base currency |
| Consolidation Rate | Rate used to translate to the consolidation subsidiary's currency |
| Amount (Consolidated) | Amount in the consolidated (reporting) currency |
The report uses different rates for different lines by design:
- ROU asset lines - always use the historical exchange rate. The rate is pulled from the schedule lines on the lease, since the rate entered in the header section of the lease record can change with modifications.
- Cash flows paid lines - use the exchange rate on the date of the transaction, which is the last day of the month in most cases.
The Consolidated Exchange Rate filter is only used for the consolidation rate column. For cash flows the rate is typically Average, so that is what the report defaults to, but other options can be selected. The Custom option uses the rate in the currency exchange rates list for the date entered.
Audits, disclosures and footnotes
The report is designed to produce the cash flow and noncash amounts required by ASC 842-20-50-4(g)(1)-(2). Below is the lease quantitative disclosure guidance:
ASC 842-20-50-4 For each period presented in the financial statements, a lessee shall disclose the following amounts relating to a lessee’s total lease cost, which includes both amounts recognized in profit or loss during the period and any amounts capitalized as part of the cost of another asset in accordance with other Topics, and the cash flows arising from lease transactions:
a. Finance lease cost, segregated between the amortization of the right-of-use assets and interest on the lease liabilities.
b. Operating lease cost determined in accordance with paragraphs 842-20-25-6(a) and 842-20-25-7.
c. Short-term lease cost, excluding expenses relating to leases with a lease term of one month or less, determined in accordance with paragraph 842-20-25-2.
d. Variable lease cost determined in accordance with paragraphs 842-20-25-5(b) and 842-20-25-6(b).
e. Sublease income, disclosed on a gross basis, separate from the finance or operating lease expense.
f. Net gain or loss recognized from sale and leaseback transactions in accordance with paragraph 842-40-25-4.
g. Amounts segregated between those for finance and operating leases for the following items:
- Cash paid for amounts included in the measurement of lease liabilities, segregated between operating and financing cash flows
- Supplemental noncash information on lease liabilities arising from obtaining right-of-use assets
- Weighted-average remaining lease term
- Weighted-average discount rate.
Below is an example of a Supplemental Cash Flow disclosure for Financial Statements. The report within NetLease is designed to fulfill this disclosure requirement.
| Footnote line | Where to find it |
|---|---|
| Operating cash flows paid for operating leases | Operating Cash Flows Paid for Operating Leases |
| Operating cash flows paid for interest portion of finance leases | Operating Cash Flows Paid for Interest Portion of Financing Leases |
| Financing cash flows paid for principal portion of finance leases | Financing Cash Flows Paid for Principal Portion of Financing Leases |
| ROU assets obtained in exchange for lease obligations - operating leases | The three ROU Assets Obtained On Operating Lease lines (commencements, term modifications, impairments) |
| ROU assets obtained in exchange for lease obligations - finance leases | The three ROU Assets Obtained On Financing Lease lines (commencements, term modifications, impairments) |
| (g)(3) Weighted-average remaining lease term | NetLease - Weighted Average Term Report |
| (g)(4) Weighted-average discount rate | NetLease - Weighted Average Rate Report |
| (a)-(e) Components of lease cost | NetLease - Components of Lease Costs & Impairments Report |
Tips for audit support
- Export at Full Hierarchy to give auditors the summary, lease-level and subledger-line detail in one file.
- Run the report for each period presented (for example current year and prior year) with the same filters, so the footnote columns are consistent.
- Decide with your auditors whether ROU impairment lines belong in the noncash ROU additions total, and present them consistently between periods.
- Keep the export with your close workpapers. Scheduled reports can save it automatically each period.
Frequently asked questions
Is this report a saved search? Can I edit its columns?
No. It is a scripted report, so its rows and columns are fixed by NetLease. You can narrow results with the filters. To build a different layout, see NetLease - Custom Scripted Report.
Which modification types count as term modifications?
The ROU Assets Obtained On ... Lease Term Modifications lines include Standard, Complete, Scope Decrease, Renewal and True Up modifications. ROU impairment modifications are reported on their own Impairments lines.
Why is the interest or principal for a month showing in a later month?
Interest and principal on Financing leases are reported with the schedule line that has a payment. When a schedule line has no payment, its interest and principal are carried forward and reported with the next schedule line in the report range that has a payment, so the lines reflect cash paid rather than amounts accrued.
Can I run it for a quarter or a full year?
Yes. Select a quarter or year accounting period, or enter a From Date and To Date. The report totals the activity across the whole range.
Which exchange rate is used for foreign-currency leases?
ROU asset lines use the lease's historical rate. Cash paid lines use the rate on the date of each schedule line. The Consolidated Exchange Rate filter then controls translation to the reporting currency. See FX implications above.
How does it work with multi-book accounting?
When an accounting book is selected, the report uses each lease's classification for that book. For example, a lease that is Operating in the primary book and Financing in a secondary book is reported under the classification for the selected book.
Troubleshooting
- A lease is missing - confirm the lease is classified as Operating or Financing and its schedule covers the selected period, and check that no subsidiary, segment or lease filter excludes it.
- A new lease is not in ROU Assets Obtained On ... Commencements - confirm the commencement falls within the selected period or date range.
- Cash paid differs from vendor bills - the report reads from the NetLease subledger payment schedule, not from vendor bills or payments. Use NetLease - Reconciling the Subledger to the General Ledger to tie out.
- FX amounts look wrong - rerun with Show FX Calculations checked and review the rates applied to each line.
