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Leases

6. Where Do The Numbers Come From?

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So, where do the numbers come from?

You may want to see how Intacct calculates the numbers in the background. In this chapter, we will use a lease example and go over the basic steps of how they are calculated in Excel. After that, we will use the Lease Accounting module to enter the same lease and compare the results.

In Excel, this is a 10-step process, but we will cover the first 6 steps in the example:

  1. Prepare Payment Schedule

  2. Calculate Lease Liability

  3. Adjust Lease Liability to Right-of-Use Asset (if applicable)

  4. Create Lease Liability Schedule

  5. Create RoU Asset Schedule

  6. Summarize the expenses into periods

7. Post Initial Recognition GL Entry

8. Pay the Lessor every month

9. Post Interest Expense every month

10. Post Depreciation Expense every month

In Intacct, this is only a 5-step process. In our video, we will cover the first three:

  1. Create Lease

  2. Generate Payment Schedules

  3. Generate Schedules (Lease Liability & RoU)

4. Put in Service

5. Wait for e-mails to let you know Payment Entries and/or Journal Entries are posting

If you would like to follow the IFRS or US GAAP Finance Lease, please watch this video. Here is the link for the accompanying spreadsheet.

If you would like to follow the US GAAP Operating Lease example, please watch this video. Here is the link for the accompanying spreadsheet.