ctcLink Accounting Manual | 40.60.20 Right-To-Use Lease Agreements as Lessee
40.60.20 Right-To-Use Lease Agreements as Lessee
Right-to-use lease assets are to be capitalized at the value of the sum of the initial measurement of the lease liability, any ancillary charges, and/or lease payments made to the lessor at or before the commencement of the lease term, less any lease incentives received from the lessor at or before the commencement of the lease term.
Lessees should account for a lease as an acquisition and the incurrence of a liability:
- Recording the lease asset and lease liability at its inception,
- Updating the Facilities Portfolio Management Tool (FPMT),
- Separating periodic payments into principal and interest portions,
- Applying payments to the correct object of expenditure, and
- Amortizing the lease asset
Amortization schedule example
The following amortization schedule from FPMT is the basis for the amounts in the illustrative entries and instructions in Section 40.60.20.1
|
Unique Identifier |
LA0001 |
Lease Term |
3 |
|
Lease Number |
SRL-123456 |
Useful Life |
|
|
Asset Type |
Land.11 |
Interest Rate |
0.89% |
| Pmt No | Payment Date | Principal | Interest | Payment | Liability Balance | Amortization Expense | Cumulative Amortization | Asset Balance |
|---|---|---|---|---|---|---|---|---|
|
0 |
|
|
|
|
$1,066,109.82 |
|
|
$1,066,109.82 |
|
1 |
4/1/2021 |
30,000.00 |
-- |
30,000.00 |
1,036,109.82 |
29,614.16 |
29,614.16 |
1,036,495.66 |
|
2 |
5/1/2021 |
29,231.55 |
768.45 |
30,000.00 |
1,006,878.27 |
29,614.16 |
59,228.32 |
1,006,881.50 |
|
3 |
6/1/2021 |
29,253.23 |
746.77 |
30,000.00 |
977,625.0 |
29,614.16 |
88,842.49 |
977,267.34 |
|
4 |
7/1/2021 |
29,274.93 |
725.07 |
30,000.00 |
948,350.11 |
29,614.16 |
118,456.65 |
947,653.18 |
|
30 |
9/1/2023 |
29,844.71 |
155.29 |
30,000.00 |
179,533.67 |
29,614.16 |
888,424.85 |
177,684.97 |
|
31 |
10/1/2023 |
29,866.85 |
133.15 |
30,000.00 |
149,666.83 |
29,614.16 |
918,039.01 |
148,070.81 |
|
32 |
11/1/2023 |
29,889.00 |
111.00 |
30,000.00 |
119,777.83 |
29,614.16 |
947,653.18 |
118,456.65 |
|
33 |
12/1/2023 |
29,911.16 |
88.84 |
30,000.00 |
89,866.66 |
29,614.16 |
977,267.34 |
88,842.49 |
|
34 |
1/1/2024 |
29,933.35 |
66.65 |
30,000.00 |
59,933.32 |
29,614.16 |
1,006,881.50 |
59,228.32 |
|
35 |
2/1/2024 |
29,955.55 |
44.45 |
30,000.00 |
29,977.77 |
29,614.16 |
1,036,495.66 |
29,614.16 |
|
36 |
3/1/2024 |
29,977.77 |
22.23 |
30,000.00 |
0.00 |
29,614.16 |
1,066,109.82 |
0.00 |
|
|
Grand Total |
$1,066,109.82 |
$13,890.18 |
$1,080,000.00 |
|
$1,066,109.82 |
|
|
40.60.10 Right-To-Use Lease Agreements << 40.60.20 >> 40.60.30 Right-To-Use Lease Asset (Lessor)
