40.60.30 Right-To-Use Lease Asset (Lessor)

At the lease inception, the lease receivable should be recorded at the present value of payments expected to be received during the lease term, including the following:

Fixed payments
Variable payments that depend on an index or a rate (such as the Consumer Price Index or a market rate), measured using the index or rate as of the commencement of the lease term
Variable payments that are fixed in substance
Residual value guarantee payments that are fixed in substance
Less any lease incentives payable to the lessee

The future lease payments are to be discounted using the interest rate the lessor charges the lessee. If the rate is not specifically stated, then the current interest rate the lessor would be charged at the inception of the lease to borrow the funds necessary to purchase the asset should be used.

Variable payments based on future performance of the lessee or usage of the underlying asset should not be included in the measurement of the lease receivable. Rather, those variable payments should be recognized as revenue in the period in which it was earned using revenue account 4120080.

The deferred inflow of resources is equal to the sum of the lease receivable, lease payments received from the lessee at or before the commencement of the lease term that relate to future periods (for example, the final month’s rent), less any lease incentives paid to, or on behalf of, the lessee at or before the commencement of the lease term.

The deferred inflow on leases should equal the sum of the initial measurement of the lease receivable and any lease payments received from the lessee at or before the commencement of the lease term that relate to future periods (for example, the final month’s rent), less any lease incentives paid to, or on behalf of, the lessee at or before the commencement of the lease term.

The following amortization schedule from FPMT is the basis for the amounts in the following illustrative entries and instructions.

Individual Receivable Lease Amortization Schedule

The following amortization schedule from FPMT is the basis for the amounts in the illustrative entries and instructions in Section 40.60.30.1

Expand All

Terms, Coding and Interest Rate

Unique Identifier	LA0001	Lease Term	3
Lease Number	SRL-123456-R	Useful Life
Asset Type	Land	Interest Rate	0.89%

Individual Lease Amortization Schedule

Pmt No	Payment Date	Principal	Interest	Payment	Lease Receivable Balance	Revenue	Deferred Inflow Balance
0					$835,119.36		$835,119.36
1	8/26/2021	23,500.00	-	23,500.00	811,619.36	23,197.76	811,921.60
2	9/26/2021	22,898.05	601.95	23,500.00	788,721.31	23,197.76	788,723.84
3	10/26/2021	22,915.03	584.97	23,500.00	765,806.28	23,197.76	765,526.08
4	11/26/2021	22,932.03	567.97	23,500.00	742,874.25	23,197.76	742,328.32
5	12/26/2021	22,949.03	550.97	23,500.00	719,925.22	23,197.76	719,130.56
6	1/26/2022	22,966.06	533.94	23,500.00	696,959.16	23,197.76	695,932.80
7	2/26/2022	22,983.09	516.91	23,500.00	673,976.07	23,197.76	672,735.04
8	3/26/2022	23,000.13	499.87	23,500.00	650,975.94	23,197.76	649,537.28
9	4/26/2022	23,017.19	482.81	23,500.00	627,958.75	23,197.76	626,339.52
10	5/26/2022	23,034.26	465.74	23,500.00	604,924.48	23,197.76	603,141.76
11	6/26/2022	23,051.35	448.65	23,500.00	581,873.14	23,197.76	579,944.00
32	3/26/2024	23,413.05	86.95	23,500.00	93,825.97	23,197.76	92,791.04
33	4/26/2024	23,430.41	69.59	23,500.00	70,395.55	23,197.76	69,593.28
34	5/26/2024	23,447.79	52.21	23,500.00	46,947.76	23,197.76	46,395.52
35	6/26/2024	23,465.18	34.82	23,500.00	23,482.58	23,197.76	23,197.76
36	7/26/2024	23,482.58	17.42	23,500.00	0.00	23,197.76	(0.00)
	Grand Total	$835,119.36	$10,880.64	$846,000.00		$835,119.36