Lease Accounting Help Page Summary

This tutorial page will instruct you on using the Lease Accounting feature for a specific Lease. The Lease Accounting page will be displayed for all lease types. For iLeasePro general navigation instructions, please visit the QuickStart General Navigation page.

Using the iLeasePro Lease Accounting Feature

Note: The Lease Accounting General Ledger accounts are required to be setup prior to being able to use the iLeasePro Lease Accounting feature at the lease level. See Account Setting - Setting Up Lease Accounting for further information.

The Lease Accounting feature within iLeasePro encompasses two levels; the individual Lease Level and the Portfolio Level.

Lease Level

Each lease requires certain accounting data to be completed in order to accurately calculate the correct lease accounting information. These values are selected and entered on the Lease Accounting page within the lease. This help page explains in detail how to complete the Lease Accounting requirements for a specific lease.

Portfolio Level

The iLeasePro Portfolio Accounting feature allows you to create amortization schedules and/or journal entries for the lease portfolio or groups within the lease portfolio. Additional information for the Portfolio accounting can be found in the Entering and Maintaining Portfolio Accounting help site.

Page Sections

The Lease Accounting page contains information and is separated into two sections;

1. Lease Accounting Information

Entering and maintaining lease accounting lease information
The iLeasePro Lease Classification Wizard
Generating the Amortization data and Journal Entries for a Month/Year
Working with Leases that Terminate Early

2. Lease Accounting Document Management

Section Help

Every page with Sections offers you additional help for that Section. This help information can be accessed by clicking on the question mark in the Section header bar.

Notes

To add annotations/notes to support the information entered, click on the notepad icon shown above. A new page will be displayed where you can add personalized notes that you would like to make to help you or others in your team identify key dates/reasons, etc for the lease information entered.

Lease Accounting Info

The Lease Accounting page is used to view and create lease accounting amortization table and journal entries, export amortization table or journal entries, or upload journal entries if you are a customer of a partner accounting software, like Sage Intacct.

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Lease Accounting Lease Information

Select the Operating Subsidiary. Required. Dropdown selection of operating entities or subsidiaries defined for the account for this specific lease. The Subsidiary function in iLeasePro allows a corporation with multiple subsidiaries to maintain its entire corporate wide lease portfolio on a single iLeasePro platform. When it is time to upload periodic journal entries to a general ledger system of record, the user designates the subsidiary to which the lease is associated and the entry is posted to the subsidiary general ledger.

Lease Classification Wizard

The Lease Classification Wizard will help the user in determining the classification of the lease based on the values entered and the answers to the questions.

Note: The selections offered, percentage used for the lease term and fair value tests are examples of what might be considered acceptable for determining operating versus financing classification. But the user is ultimately responsible for determining these parameters.

Select Accounting Method is a user selected value. The user can leverage the Lease Classification Wizard or select via the radio button the appropriate accounting method that should be used for this lease in regards to the Lease Accounting Standards. There are three methods that can be selected;

Operating Lease Method
Finance Lease Method
Short-Term Lease Method (Note: The Short-Term checkbox on the General Lease tab must be selected in order to ensure accurate calculations)

Entering a Finance Lease. There may be an additional field requirement for a Finance Lease if you will own the lease at the end of the lease term. If the asset will be owned at the end of the lease term, you will need to provide the End of Useful Life Date.

Relevant Borrowing Rate. This value is user entered numeric percentage value. The Relevant Borrowing Rate is a required value for the transition to ASC 842 and used in the amortization calculations for purposes of discounting lease payments.

Working with a Lease that has Terminated Early

If the status of the current lease has been set to “Early Termination” and the current select Month and Year is equal to the Early Termination Month and Year, the user will be asked to enter in any Early Termination Payment or Receipt Amount. The Early Termination Gain/Loss will be calculated based on the current lease information gathered. Review the How do I add an Early Terminated Lease Help Guide for further information

Note that the journal entries will be automatically created for the month the Early Termination date has been specified for.

Amortization Schedule and Journal Entries

Show Journal Entries By Day

To create journal entries for a month that can be uploaded or imported into the accounting system of record for this lease, the user will select the month and year to create the journal entries for and select the Show Journal Entries by Day radio button.

Click the Include Variable Payments checkbox if you want to include any scheduled Real Estate Tax, Insurance Expense, Sales Tax or Other variable payments that have been defined for the Year and Month selected below.

Select Year. From the dropdown list select the year of the month that you want to create a journal entry for.

Select Month. From the dropdown list select the month within the year that you want to create a journal entry for.

These selections will automatically generate the amortization results or journal entries for the Year and Month selected.

Uploading a Journal Entry. If an accounting software integration has been established by your administrator, a button will be displayed indicating that a journal entry can be created and uploaded via webservices. In this case we are showing that the user can create and upload the journal entries for February 2021 into the accounting system of record, which is Intacct.

Exporting a Journal Entry. To export the journal entries to an excel spreadsheet, simply click on the Export General Ledger button as shown. Example below;

Show Amortization By Day

iLeasePro calculates the daily ROU Asset and Lease Liability Amortization schedules. To view the daily amortization schedule select the Show Amortization By Day radio button.

Show Amortization By Month

iLeasePro calculates the daily ROU Asset and Lease Liability Amortization schedules but consolidates the view to allow for a monthly schedule. To view the monthly amortization schedule select the Month and Year to build and select the Show Amortization By Month radio button.

Show Amortization Schedule or Journal Entries For All Years in Lease Term

To view the monthly amortization schedule for all Years in the lease term, select the "All Years" option in the Select Year dropdown list. You can also see all the Months in a selected year by selecting the year and then "All Months" in the Select Month dropdown.

Export the Amortization Data for a specific Year and Month. To export the Amortization data to excel spreadsheet for the selected year and month, simply click on the Export Table button as shown.

Export the Amortization Data for the entire Lease Term. To view the Amortization data for the entire lease term, select “All Years” from the Select Year dropdown indicated by the red arrow below. To export the Amortization data to excel spreadsheet, simply click on the Export Table button as shown.

Lease Accounting Document Management

For detailed explanation on uploading an electronic document into iLeasePro, please reference the Upload Document Help Page.

R2022.02.02