Lease liability calculation
In Planon, the lease liability is calculated and registered in the accounting commitments.
 | In the case of lessors, we use the term 'lease receivable' instead of 'lease liabilities'. The underlying principle, however, is the same. In the standard configuration of Planon Lease accounting, the signle label 'Lease liability' stands for all the specific labeling used in the different standards: • Lessee ◦ IFRS 16 Lease liability ◦ ASC 842 Lease liability ◦ GASB 87 Lease liability ◦ GASB 96 Subscription liability • Lessor ◦ IFRS 16 Net investment ◦ ASC 842 Net investment in the lease ◦ GASB 87 Lease receivable |
Lease liabilities are divided into short-term liabilities (shorter than one year) and long-term liabilities (longer than one year). Each accounting period includes a reclassification of liability from long-term to short-term.
For example, if an organization has a lease over a 15-year period, the lease payments that are due during the coming year are recorded in the short-term liabilities section of the balance sheet.
At the start of the lease, Planon calculates the short-term liability and the long-term liability, which is the total liability minus the short-term liability. Every time at the end of an accounting period, the time window of one year changes and the change is reclassified from 'long-term' to 'short-term'.
Long-term liability decreases over time. If the remaining lease term is shorter than 12 months, the long-term liability is zero.
| | • If the lease liability is remeasured, Planon will also recalculate the short-term and the long-term liability. • Lease liability is also included in the postings, indicated by the following codes: • ST_LELI (=short-term liability) and LT_LELI (=long-term liability) for lessees • ST_LERE (=short-term lease receivable) and LT_LERE (=long-term lease receivable) for lessors |
For more information on the available data fields for accounting commitments, see Accounting commitment data fields. For more information on the available data fields for postings, see Posting and journal entry fields.