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Lease Details

Modules > Subscription Billing > Billing schedules > Active billing schedules > [select a billing schedule] > Billing schedule lines [select a line] > View Billing Detail > ASC 842/IFRS 16

Use this page to specify and update the details for the billing lines of a lease. You can also review the billing lines for the periods.

Create the Initial Journal Entry

On the Lease details form, you can adjust fields in the following areas:

General: Displays general costs and details of the billing line. You can enter values in the Asset cost and Asset fair value fields, for example.
Lease accounts: Displays the default accounts that you set up in Lease Defaults. You can change the accounts for the specific billing line.
Lease incentives: Displays lease incentives that apply to the billing line. You can create incentives for your leases by selecting Lease incentives > New.

To create the initial journal entry, do the following:

Make any adjustments to the fields under these tabs:
1. General
2. Lease accounts
3. Lease incentives
After you have entered your lease values, select Process.

The fields on the lease details form are then updated with the values you entered.
Once you have finished your adjustments, select Create initial journal.

It is necessary for all finance leases to create a journal entry so that any generated invoices display the updated lease details. For operating leases, if there is no direct cost then you do not need an initial journal entry to generate invoices.
Select the Initial journal date and then select OK.

After you have created the initial journal entry for your lease you can then generate an invoice. Lease lines only appear as an option to invoice after the initial journal entry is created.

Fields

The header contains the following read-only fields:

Lease detail fields
Field	Description
Billing schedule number	Displays the billing schedule number.
Item number	Displays the item number.
Net amount	Displays the net amount for the charge for the billing schedule.

Buttons

The header contains the following buttons:

Lease detail buttons
Field	Description
Process	Updates the lines in the lease details form.
Create initial journal	Creates the initial journal.
Create asset return	Creates a journal and audit line. Only available once all periods have been fully posted. Only visible for finance leases.

General (tab)

The following section describes the available fields under the General tab for three types of leases under the ASC 842 and IFRS 16 accounting standards.

The Classification drop-down is available under the General tab. The Classification menu is only enabled for modifications after the initial journal entry has been posted. Use it to select the type of lease:

Sales type lease
Direct financing lease
Operating lease
Exempt lease: Select the exempt type for the charge where the recognition exemption is applied. For example, if you have a low value asset or short-term lease or non-lease components.

General (tab) fields
Lease classification	Fields
ASC 842 Fields
Available fields for all three of: Sales type lease Direct financing lease Operating lease	Asset cost: Displays the value from the net investment of the last invoice after the journal is created and invoiced. Modified asset cost: Displays the original asset cost that was modified. Asset fair value Residual value Direct cost: Displays the value from the Operating Unamortized direct cost balance of the last invoice after the journal is created and invoiced. Modified direct cost: Displays the original direct cost that was modified. Direct cost at modification: Enter direct costs incurred at modification.
Available fields for Sales type lease	Guaranteed residual value Unguaranteed residual value Implicit rate
Available fields for Direct financing lease	Guaranteed residual value Unguaranteed residual value Implicit rate Implicit carrying rate value
Available fields for Operating lease	Calculate straight line: If switched on, then straight line income is calculated. Straight line income Direct cost
IFRS 16 Fields
Available fields for all three of: Sales type lease Direct financing lease Operating lease	Asset cost Modified asset cost Asset fair value Residual value Direct cost Modified direct cost Direct cost at modification
Available fields for Sales type lease	Guaranteed residual value Unguaranteed residual value Implicit rate Substantial/Not substantial Yes: Recalculates the implicit rate after you select Process. No: Uses the old implicit rate and does not calculate a new implicit rate.
Available fields for Direct financing lease	Guaranteed residual value Unguaranteed residual value Implicit rate Substantial/Not substantial Yes: Recalculates the implicit rate after you select Process. No: Uses the old implicit rate and does not calculate a new implicit rate.
Available fields for Operating lease	Calculate straight line: If switched on, then straight line income is calculated. Straight line income Direct cost expense

Lease accounts (tab)

The following section displays the lease accounts that you have set in the ASM Parameters form as well as lease accounts set on Lease tab of the billing schedule line. Under this tab, you can change the accounts connected to the billing line without having to go back to the billing schedule window.

If you have enabled deferrals in the ASM Parameters form, then deferral accounts are also visible.

Lease accounts
Accounting standard	Accounts
Lease accounts for ASC 842	For a Sales type lease, the following accounts are visible: Lease receivable account Unguaranteed residual value account Asset clearing account Interest income account Direct cost expense account Direct cost clearing account Revenue account Cost of sale account Rounding account Interest income deferred account - visible if deferrals are enabled For a Direct financing lease, the following accounts are visible: Lease receivable account Unguaranteed residual value account Asset clearing account Interest income account Direct cost expense account Direct cost clearing account Rounding account Deferred profit account - visible if deferrals are enabled Direct cost expense deferred account - visible if deferrals are enabled For an Operating type lease, the following accounts are visible: Direct cost expense account Direct cost clearing account Unamortized direct cost account Revenue account Rounding account Deferred lease receivable account - visible if deferrals are enabled Lease income deferred account - visible if deferrals are enabled Direct cost expense deferred account - visible if deferrals are enabled
Lease accounts for IFRS 16	For a Sales type lease, the following accounts are visible: Lease receivable account Unguaranteed residual value account Asset clearing account Interest income - lease receivable account Interest income - unguaranteed residual value account Direct cost expense account Direct cost clearing account Revenue account Cost of sale account Rounding account Gain on modification account Loss on modification account Unearned income - unguaranteed residual value account Interest income deferred account - visible if deferrals are enabled For a Direct financing lease, the following accounts are visible: Lease receivable account Unguaranteed residual value account Asset clearing account Interest income - lease receivable account Interest income - unguaranteed residual value account Direct cost clearing account Unearned income - unguaranteed residual value account Rounding account Gain on modification account Loss on modification account Interest income deferred account - visible if deferrals are enabled Unearned income deferred – lease receivable account - visible if deferrals are enabled Unearned income deferred – unguaranteed residual value - visible if deferrals are enabled For an Operating type lease, the following accounts are visible: Revenue account Direct cost expense account Direct cost clearing account Unamortized direct cost account Revenue account Rounding account Deferred lease receivable account - visible if deferrals are enabled Lease income deferred account - visible if deferrals are enabled Direct cost expense deferred account - visible if deferrals are enabled

Lease incentives (tab)

The following section describes the available fields under the Lease incentives tab for all three types of leases under the ASC 842 and IFRS 16 accounting standards.

Fields

The following field boxes are available:

Lease incentives fields
Field	Description
Type	Select the type of incentive. Tenant incentive is the only available type of incentive.
Option	Select the payment option for the incentive. Lump sum: A one time payment. Recurring: A recurring payment schedule. You must select an end date for this payment option.
Start date	Select the start date of the incentive.
End date	If you are using a recurring payment option, select an end date of the incentive.
Amount	Select the amount of the incentive.

Buttons

The following field boxes are available:

Lease incentives buttons
Button	Description
New	Create a new line under Lease incentives.
Remove	Remove a selected line.

Totals (tab)

The following section describes the fields under the Totals tab for Sales type leases and Direct financing leases under the ASC 842 and IFRS 16 accounting standards. The fields are view only.

Totals (tab) fields
Lease classification	Fields
ASC 842 Fields
Available fields for both: Sales type lease Direct financing lease	Implicit rate Net present value Present value of guaranteed residual value Present value of unguaranteed residual value Lease receivables Net investment
Available fields for Sales type lease	Revenue Cost of sale Gross profit/loss
Available fields for Direct financing lease	Implicit rate carrying value Asset cost Deferred profit
IFRS 16 Fields
Available fields for both: Sales type lease Direct financing lease	Implicit rate Net present value Present value of guaranteed residual value Present value of unguaranteed residual value Lease receivables Net investment Unearned income - unguaranteed residual value Unearned income - lease receivable account
Available fields for Sales type lease	Revenue Cost of sale Gross profit/loss
Available fields for Direct financing lease	Asset cost

Amortization schedule (tab)

The following section describes the available columns under the Amortization schedule tab for three types of leases under the ASC 842 and IFRS 16 accounting standards.

Amortization schedule (tab) fields
Lease classification	Fields
ASC 842 Fields
Available fields for all three of: Sales type lease Direct financing lease Operating lease	Period Start/End date Amount
Available fields for Sales type lease	Present value Interest on lease receivable Interest on unguaranteed residual value Interest or investment Net investment balance Lease receivable balance Unguaranteed residual value balance
Available fields for Direct financing lease	Present value Interest on lease receivable Interest on unguaranteed residual value Earned profit Interest on investment Net investment balance Lease receivable balance Unguaranteed residual value balance Deferred profit
Available fields for Operating lease	Straight line income Deferred rent receivable Deferred rent receivable balance Direct cost expense Unamortized initial direct costs
IFRS 16 Fields
Available fields for all three of: Sales type lease Direct financing lease Operating lease	Period Start/End date Amount
Available fields for Sales type lease	Present value Interest on lease receivable Interest on unguaranteed residual value Interest on investment Unearned income - unguaranteed residual value Unearned income - lease receivable account Net investment balance Lease receivable balance Unguaranteed residual value balance
Available fields for Direct financing lease	Present value Interest on lease receivable Interest on unguaranteed residual value Interest on investment Unearned income - unguaranteed residual value Unearned income - lease receivable account Net investment balance Lease receivable balance Unguaranteed residual value balance
Available fields for Operating lease	Straight line income Deferred rent receivable Deferred rent receivable balance Direct cost expense Unamortized initial direct costs

Audit (tab)

The following section describes the available columns under the Audit tab for three types of leases under the ASC 842 and IFRS 16 accounting standards.

Audit (tab) fields
Lease classification	Fields
ASC 842 Fields
Available fields for all three of: Sales type lease Direct financing lease Operating lease	Start date Lease incentives Fair value Journal number Comment Date Modification date
Available fields for Sales type lease	Implicit rate Net present value Guaranteed residual value Unguaranteed residual value Lease receivables Net investment Revenue Cost of sale Gross profit/loss Initial direct cost Present value of guaranteed residual value Present value of unguaranteed residual value
Available fields for Direct financing lease	Implicit rate Implicit carrying rate value Net present value Guaranteed residual value Unguaranteed residual value Lease receivables Deferred profit Net investment Initial direct cost Present value of guaranteed residual value Present value of unguaranteed residual value
Available fields for Operating lease	Asset cost Residual value Direct cost Straight line income Direct cost expense
IFRS 16 Fields
Available fields for all three of: Sales type lease Direct financing lease Operating lease	Start date Lease incentives Fair value Journal number Comment Date Modification date
Available fields for Sales type lease	Implicit rate Market value Net present value Guaranteed residual value Unguaranteed residual value Lease receivables Fair value Net investment Revenue Cost of sale Unearned lease receivable Unearned unguaranteed residual value Initial direct cost Present value of guaranteed residual value Present value of unguaranteed residual value
Available fields for Direct financing lease	Implicit rate Net present value Guaranteed residual value Unguaranteed residual value Lease receivables Fair value Net investment Unearned lease receivable Unearned unguaranteed residual value Initial direct cost Present value of guaranteed residual value Present value of unguaranteed residual value
Available fields for Operating lease	Fair value Asset cost Residual value Direct cost Straight line income Direct cost expense