For GASB 87 / 96, in both lessee and lessor perspective, unpaid interest is accrued and reported separately from the lease liability (accrued interest liability) or lease receivable (accrued financial receivable). Payments made are first allocated to the accrued interest or accrued financial income before the lease liability or lease receivable.

Accrued interest and lease liability are reported separately. The liability is reported under three positions:

The interest is calculated based on carrying value of the lease liability, on a consistent manner between each payment. In Planon Lease Accounting, this consistent method consists in having a month as a consistent period (for example, a quarterly payment leads to three consistent monthly accrued interest).

As periodic interest is accrued, the carrying value of the lease liability remain constant between each payment.