NetLease - Lease renewal options
Overview
The Lease Renewal Options report is a saved search that lists every lease with a renewal option recorded against it, one line per lease. Each line includes the key contract provision information for the renewal option, so renewal rights across the lease portfolio can be reviewed in one place instead of opening each lease.
Renewal options are recorded on the lease as a NetLease Contract Provision child record with the Contract Provision Type field set to Lease Renewal Option. The report only shows renewal options entered this way. See NetLease - Capturing Contract Provisions for how to add a contract provision.
Report details
| Report type | Saved search (bundled with NetLease, not a scripted report) |
| Category | Disclosure reports |
| Data source | NetLease Contract Provision records with a Contract Provision Type of Lease Renewal Option |
| Standard | Supports the qualitative disclosure of options to extend a lease in ASC 842-20-50-3(a) |
When to use this report
- Quarter-end and year-end reporting - to draft the narrative footnote describing the existence and terms of options to extend leases.
- Audit requests - when auditors ask for a listing of leases with renewal options, to test the lease term judgments made at commencement or modification.
- Lease term reviews - to identify renewal options that may need to be reassessed for whether exercise is reasonably certain.
- Renewal management - to track upcoming renewal decisions so notice deadlines are not missed.
Prerequisites
- A role that can run NetLease disclosure reports and view NetLease Contract Provision records.
- Renewal options are entered as NetLease Contract Provision records on each lease, with the Contract Provision Type set to Lease Renewal Option. See NetLease - Capturing Contract Provisions.
Running the report
- Navigate to NetLease > Reports > Disclosure Reports > Lease Renewal Options > Run.
- Set the filters (see below). The results update automatically as filter options are selected.
| Filter | Description |
|---|---|
| Lease | Limits results to a single lease, or select "All" for every lease. |
| Subsidiary | Limits results to leases for the selected subsidiary. |
| Lease Type | Limits results to leases of the selected lease type. |
| Status | Limit results to leases of the selected status. |
Filter by specific lease or by "All" to see a full list of leases with renewal options.
Results
The report shows a single line per renewal option for the selected lease, subsidiary and lease type. Each line includes the contract provision key information for the renewal option. Because the report is a saved search, the exact columns are those shown in the search results below.
Audits, disclosures and footnotes
Under ASC 842-20-50-3(a), a lessee discloses qualitative information about the nature of its leases, including the existence and terms and conditions of options to extend or terminate the lease. This report provides the lease-by-lease listing of renewal (extension) options behind that narrative.
| Disclosure requirement | Where to find it |
|---|---|
| Options to extend - existence and terms | This report |
| Options to terminate | Recorded as contract provisions with the Contract Provision Type set to Lease Termination Option - see NetLease - Capturing Contract Provisions |
| Purchase options | NetLease - Lease purchase options |
| Residual value guarantees | NetLease - Lease residual guarantees |
Tips for audit support
- Run the report with Lease set to "All" and export the results to give auditors the full listing.
- Use the Likely to Exercise checkbox on each renewal option to show which options the lease term assumes will be exercised, and agree it to the lease term recorded in NetLease.
- Agree a sample of lines back to the lease contract, using the contract paragraph / reference captured on each contract provision.
Frequently asked questions
Is this report a saved search? Can I edit its columns?
Yes. It is a saved search, so after running it the Edit this Search button is available. Before changing it, give the search a new title and click Save As to save a copy. Edits made directly to the bundled search can revert to the Netgain version on a future bundle update. See NetLease - Editing Reports in NetLease for the full steps, including creating a copy of the report that points to your new search.
Why is a lease with a renewal option missing from the report?
The report reads contract provision records. If the renewal option was never entered as a NetLease Contract Provision with the Contract Provision Type set to Lease Renewal Option, the lease will not appear. Also check that the Lease, Subsidiary and Lease Type filters do not exclude it.
Does checking Likely to Exercise extend the lease term?
No. Likely to Exercise is used for disclosure reporting. Adjustments to the lease term and dates must be made on the lease itself; checking the box does not change them.
Can I be reminded before a renewal option expires?
Yes. The bundled NetLease Renewal Options - 90 Days search covers renewal options set to expire within 90 days, and email reminders can be set up on it. See NetLease - Set Up Email Reminders.
How do I record an auto-renewal or evergreen lease?
On the renewal option's contract provision, check Auto-Renewal / Evergreen Contract. Use Option Term, If Renewal (Full Months) and New Lease End Date After Exercise to capture the renewal period.
Troubleshooting
- No results - open a lease that should appear and check its Contract Provisions subtab for a contract provision with the Contract Provision Type set to Lease Renewal Option. If none exists, add one. See NetLease - Capturing Contract Provisions.
- A lease is missing - set Lease, Subsidiary and Lease Type to "All" and run the report again.
- Columns differ from this article - the search may have been customized in your account. Compare it to the bundled version or a saved copy.
