Theory and Practice
✔Applies to US GAAP (ASC 842) Finance Leases
✔ Applies to US GAAP (ASC 842) Operating Leases
✔ Applies to IFRS (IFRS 16)
✔ Applies to UK GAAP (FRS 102)
A lease of retail space requires additional rent of 5% of sales each month. In a month where sales are $200,000, the lessee pays $10,000 extra variable rent:
| Account | Debit | Credit |
|---|---|---|
| Lease Expense (variable) or Operating Expense | $10,000 | |
| Cash or Accounts Payable | $10,000 | |
| Record usage-based rent for the period. Such payments are not part of the lease liability; they do not affect the ROU asset or lease liability balances. | ||
Doing it in Sage Intacct Lease Accounting
Ensure that the Non-Capitalized Lease Expense GL Account is populated against the Lease Class in use.
Take the lease Out of Service
If no other changes are required to the lease, you many need to run the Generate Payment Schedules option to get the Lease into a Change Status of ‘Payment Schedules Generated’
Then Add or Import further Payment Changes to reflect the changes to the index.
Do NOT Revalue the Lease.
Place the Lease back in Service.
When Payments are processed, the effect of the change of variable payments will be posted to the Non-Capitalized Lease Expense GL Account.