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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:

  1. Recording the lease asset and lease liability at its inception,
  2. Updating the Facilities Portfolio Management Tool (FPMT),
  3. Separating periodic payments into principal and interest portions,
  4. Applying payments to the correct object of expenditure, and
  5. 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

Expand All

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)

Page Manager: slocke@sbctc.edu
Last Modified: 3/7/24, 1:18 PM

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