IFRS 16 Rent Schedule - Contract Module

To learn how to import a spreadsheet to generate your lease accounting schedule, see our Bulk Lease Accounting Data Import article.

To generate an IFRS 16 accounting schedule:

1. Click Calculate Schedule in the Actions menu on the right side of the page.

   The Create New IFRS 16 Rent Schedule window opens. The Begin Date, End Date, and Discount Rate automatically populate. Many of the fields will automatically populate with data entered on the IFRS 16 Contract Accounting Assumptions page. This is the last place where you can edit these fields prior to generating your schedule.

   To learn how to select a different discount rate from the Manage Discount Rates table, see our Search for Another Discount Rate article.

   Note:

   The default value of the Schedule Begin Date is the later of the Accounting Begin Date or the first day of the first unposted period for the schedule. You can override the value of the Schedule Begin Date in the Create Schedule window, provided the date you choose is on or after the first day of the first unposted period.

2. Select the schedule type from the Type field.

3. Select the reason for creating the schedule from the Creation Reason field.

   Creation reasons are either user-generated or generated at the company level. However, all creation reasons created at the user level will also be available at the company level.

4. If you want to specify a percentage or amount of the total asset balance that should remain after the schedule end date, enter the value in the Remaining Asset Balance field.

   There are two option buttons: Currency and Percentage. If you enter a value between 0-100, the system will default the option setting to Percentage. If you enter a value of 100.01 or above, the system will default the option setting to Currency. You can override the default option setting.

5. If you want to select a date beyond the schedule end date to amortize to, enter the date in the Date to Amortize to field.

   By default, the value of this field is the schedule end date.

   To learn more about asset amortization, see the Amortization of the Asset in Contracts article.

6. Enter any incentives that have reduced the cost of the lease in the Lease Incentive Amount field.

7. Enter any other miscellaneous costs that should be accounted for in the schedule in the PV Of Other Adjustments field.

8. Enter the amount paid towards rent prior to the commencement date, minus any incentives that have reduced the cost of the lease, in the Payments Before Commencement (Less Incentives) field.

9. Enter the incremental costs of a lease that would not have been incurred if the lease had not been obtained in the Initial Direct Costs field.

   For example, broker’s fees, certain legal fees, and certain payments to tenants to move out.

10. Enter the cost of any activity necessary to restore the asset to its original state prior to the expiration of the lease in the Dismantling / Restoring Costs field.

11. Enter any deductions related to the diminished value of the asset in the Impairments field.

    Important!

    Impairments should be entered as a negative value.

    If you enter a value in the Impairments field, two read-only fields appear:

    • Prior Accumulated Amortization Balance: Accumulated Amortization Balance of the accounting period prior to the impairment.

    • Total: Sum of the impairment and the Prior Accumulated Amortization Balance.

12. Click Create Schedule.

    The page refreshes, and the schedule appears on the page.

Re-measurement is the process by which an entity will adjust the right of use asset and lease liability due to a change. Generally, re-measurement occurs if something has changed in the contract. Maybe the termination option was renegotiated, or maybe additional costs came up that needed to be added to the contract.

When an active schedule is recalculated or terminated, the Inactive Date of the previously active schedule will automatically populate with the date of recalculation or termination.

To re-measure a lease accounting schedule:

1. Click Calculate Schedule.

   This displays in the Actions menu on the right side of the page.

   A window relevant to the schedule you are re-measuring opens.

2. Enter the dates that your re-measurement should begin and end in the Begin Date and End Date fields.

   You can also click Calendar to open the Date Picker and select the appropriate date.

   Note:

   The default value of the Schedule Begin Date is the later of the Accounting Begin Date or the first day of the first unposted period for the schedule. You can override the value of the Schedule Begin Date in the Create Schedule window, provided the date you choose is on or after the first day of the first unposted period.

3. Select the schedule type from the Type field.

4. Select the creation reason from the Creation Reason field.

   Creation reasons are either user-generated or generated at the company level. However, all creation reasons created at the user level will also be available at the company level.

5. Select the lease type from the Lease Type field.

   The data from the existing schedule populates. If there are any posted periods between the Begin Date and the End Date, the Re-measurement Balance Forward will automatically calculate the re-measurement balance forward for those posted periods.

6. Make any changes necessary to the discount rate, the liability values, and the right of use asset values prior to re-measurement.

   To learn how to select a different discount rate from the Manage Discount Rates table, see our Search for Another Discount Rate article.

7. Click Create Schedule.

   The window closes, and the page refreshes. The re-measured schedule appears in your IFRS 16 Rent Schedule List on the IFRS 16 Rent Schedule page.

When you re-measure or terminate a lease and you are going to recalculate your accounting schedules, you can allocate appropriate portions of the Remeasurement Balance Forward to remain on the balance sheet or to be counted as a capital gain/loss (profit & loss impact). This change applies to real estate contracts and lease-level schedules for equipment contracts. A common use case is a change in square footage, the closure of a store, or the retirement of some fraction of equipment assets.

When an active schedule is recalculated or terminated, the Inactive Date of the previously active schedule will automatically populate with the date of recalculation or termination.

The system prorates your termination schedule as of the day prior to the day of termination. For example:

• If you terminate your schedule as of January 15th, the system will include accounting values for all days in the period up to the 14th.

• Likewise, if you terminate your schedule as of January 21st, the system will include accounting values for all days in the period up to the 20th.

Partial Lease Termination

Full Lease Termination

Important Note About Full Lease Termination