Fullscreen Image

Amortization of the Asset in Contracts

By default, the system amortizes the asset to zero in lease accounting schedules. Some clients, particularly those with a purchase option on a lease, want to run their accounting so that there was a remaining positive asset value at the end of the accounting schedule. This positive value would demonstrate that they have an asset worth something when it is purchased. You can do this from the Create Schedule window at the contract-level, or from the Equipment Assumptions page at the asset-level.

There are three ways this functionality can be utilized:

  • You can amortize to a specific date OTHER than the end of the schedule, be it before the schedule end date or after it.

  • You can amortize to a value OTHER than 0.00.

  • You can amortize to a both a date other than the schedule end date AND a value other than 0.00.

ClosedAmortize Asset for ASC 842 Operating at the Contract-Level

Important!

As of 21.06, operating leases will no longer need to be impaired to access these settings.

When amortizing the asset on an Operating schedule, the Remaining Asset Balance and Date to Amortize to fields will not appear until you have entered a value in the Impairments field.

To amortize at the contract-level for an ASC 842 Operating schedule:

  1. Do one of the following:

    • Navigate to Contract > Accounting Info > ASC 842 Rent Schedule.

    • Navigate to Equipment Contract > Accounting Info > ASC 842 Rent Schedule.

      Use the links in the Navigation Pane on the leftmost side of the page.

  2. Click Calculate Schedule.

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

    The Create New ASC 842 Rent Schedule window opens.

  3. Select Operating from the Accounting Method field.

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

    Important!

    Impairments should be entered as a negative value.

    The Remaining Asset Balance and Date to Amortize to fields appear.

  5. 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.

  6. 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.

  7. Complete the rest of the fields in Create New ASC 842 Rent Schedule window as necessary.

    See the Calculate ASC 842 Schedule procedures on the ASC 842 Rent Schedule page to learn more about how to calculate ASC 842 schedules.

  8. Click Create Schedule.

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

ClosedAmortize Asset for ASC 842 Finance at the Contract-Level

When amortizing the asset on a Finance schedule, the Remaining Asset Balance and Date to Amortize to fields appear once you select Finance from the Accounting Method field.

To amortize at the contract-level for an ASC 842 Finance schedule:

  1. Do one of the following:

    • Navigate to Contract > Accounting Info > ASC 842 Rent Schedule.

    • Navigate to Equipment Contract > Accounting Info > ASC 842 Rent Schedule.

      Use the links in the Navigation Pane on the leftmost side of the page.

  2. Click Calculate Schedule.

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

    The Create New ASC 842 Rent Schedule window opens.

  3. Select Finance from the Accounting Method field.

    Two new fields appear: Remaining Asset Balance and Date to Amortize to.

  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.

  6. Complete the rest of the fields in Create New ASC 842 Rent Schedule window as necessary.

    See the Calculate ASC 842 Schedule procedures on the ASC 842 Rent Schedule page to learn more about how to calculate ASC 842 schedules.

  7. Click Create Schedule.

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

ClosedAmortize Asset for IFRS 16 or GASB 87 at the Contract-Level

The Remaining Asset Balance and Date to Amortize to fields appear automatically in the Create New IFRS 16 Rent Schedule and Create New GASB 87 Rent Schedule windows.

To amortize at the contract-level for an IFRS 16 or GASB 87 schedule:

  1. Choose one of the following options:

    • Navigate to Contract > Accounting Info > IFRS 16 Rent Schedule.

    • Navigate to Contract > Accounting Info > GASB 87 Rent Schedule.

    • Navigate to Equipment Contract > Accounting Info > IFRS 16 Rent Schedule.

    • Navigate to Equipment Contract > Accounting Info > GASB 87 Rent Schedule.

      Use the links in the Navigation Pane on the leftmost side of the page.

  2. Click Calculate Schedule.

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

    The Create New Rent Schedule window opens.

  3. 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.

  4. 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.

  5. Complete the rest of the fields in Create New Rent Schedule window as necessary.

    Do one of the following:

    • See the Calculate IFRS 16 Schedule procedures on the IFRS 16 Rent Schedule page to learn more about how to calculate IFRS 16 schedules.

    • See the Calculate GASB 87 Schedule procedures on the GASB 87 Rent Schedule page to learn more about how to calculate GASB 87 schedules.

  6. Click Create Schedule.

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

Closed(ASC 842 Only) Amortize at the Asset-Level

To amortize at the asset-level:

  1. Navigate to Equipment Contract > Accounting Info > ASC 842 Test.

    Use the links in the Navigation Pane on the leftmost side of the page.

  2. Select Equipment Assumptions / ASC 842 Tests from the Actions menu on the right side of the page.

    The Equipment Assumptions / ASC 842 Tests page opens.

  3. Select the equipment whose asset you want to amortize from the list at the top of the page.

    The accounting assumptions and the ASC 842 tests for the equipment populate on the page.

  4. Scroll down to the Accounting Assumptions section of the page.

  5. Select Finance from the Accounting Method Override field.

    If Operating is selected, the necessary fields will not appear.

  6. Enter a percentage or amount of the total asset balance that should remain after the schedule end date 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.

  7. Enter the date beyond the schedule end date to amortize to in the Final Asset Amount Date field.

    If you want to use the schedule end date, enter it in this field.

  8. Click Save Changes.

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

    Your changes are saved.

Accruent logo in white text.

© Copyright Accruent 2025Privacy PolicyTerms of UseLegal