Theory and Practice
Modern lease subledgers are designed to operationalize this accounting model by separating:
cash management,
liability reduction, and
period‑based expense recognition.
Provided that lease posting processes align with accounting periods, the system inherently ensures compliance with the accrual principle and the consumption‑based recognition of lease costs. Prepaid expense functionality is therefore unnecessary for in‑scope lease payments and should not be expected within a compliant lease accounting solution.