Recalculation required after upgrade?

You can use this field to check if recalculation of lease accounting contract lines is needed after an upgrade. For more information, see Recalculating commitments.

Financial reporting entity

Select the financial reporting entity that you want to link. For more information, see Linking custom ledger codes to postings.

Percentage of headlease

For finance leases, you can register a sublease as part of the headlease. In this field, specify the percentage of the headlease that is subleased. Planon uses this percentage to calculate and register the right-of-use that is transferred to the sublease. This field can only be edited for contract lines of a subcontract that have the In preparation status.

For more information on registering a sublease in Planon, see Registering a sublease.

Sublease end - RoU

Displays the right-of-use that must be transferred back to the headlease at the end of the sublease.

Impairment percentage

This field is automatically calculated and populated by Planon after you performed an impairment. If the right-of-use has decreased, you can register this as an impairment percentage in Planon (see Performing an impairment or an impairment reversal). Default value of this field is 100%.

Amount

Enter the lease amount. You cannot specify a negative amount.

Amount per

Take retrospective payments into account?

Setting this option to Yes ensures that the retrospective payments are included for accounting calculations in the original period, if a contract is entered or changed retrospectively. Default setting is No. For more information, see Amount changes in a financially closed period.

Postponed payment date

For finance lease contracts (IFRS 16) where a rent-free period and payment in advance have been agreed, you can postpone the date of the first payment. Enter the date to which you want to postpone the first payment. For more information on this subject, see Postponing the first payment date.

Payment frequency

Enter the frequency with which the amount specified in the contract line is to be paid or received.

For Amount per / Payment frequency, the following combinations are allowed:

Contract type / Secondary contract type / Tertiary contract type

Specify whether the primary, secondary, tertiary contract type is Operating lease or Finance lease. If you enter an additional accounting standard (in the Secondary accounting standard or Tertiary accounting standard field), you can choose which classification to use for this standard. For example, you can calculate according to IFRS 16 Finance lease and IAS 17 Operating lease.

Note that it is only allowed to enter the fields related to lease accounting if the Contract type field is filled.

Accounting standard / Secondary accounting standard / Tertiary accounting standard

Select the required primary / secondary / tertiary accounting standard based on which the calculations will be applied. You can specify up to three accounting standards for one contract line. Planon will then generate three sets of accounting commitments: one set for each standard. Note that this field is only available if the contract type is Finance lease.

If you select ASC842 or IFRS16, calculations are based on the new accounting standards.

If you select IAS17 or ASC840 or leave the field empty: calculations are based on the old lease accounting standards.

This setting can only be modified if the contract line has the Inactive status. If the contract line is already Active, you can only enter the old accounting standards.

For more information on specifying a secondary or tertiary accounting standard, see Using multiple accounting standards.

Accounting commitment period

Select a duration for which the accounting commitments must be calculated and displayed on the Accounting commitments step.

Accounting commitment start date

This field displays the date as of which you need to start an accounting period to make sure that a financial year contains a complete number of accounting periods. This field is populated automatically. The financial year and start date of the contract line are taken into account when calculating this date.

Horizon date

Displays the horizon date for lease calculations. The Horizon Date is used to determine the calculation date until which Planon creates commitments. You can specify a horizon date at the Contracts level. For more information, see Contract data fields.

Straight-line payment?

Specify if lease payments that cover more than one accounting period must be straight-lined to the same frequency as accounting periods. In Planon, accounting periods can be monthly or weekly. By default, this field is set to No. Once a contract is active, this field can no longer be changed. For more information on straight-lining lease payments, see Straight-lining lease payments .

Contract currency

Enter the Contract currency that you want to use.

Functional currency

Enter the Functional currency that you want to use.

If both currency fields are empty, the accounting commitments are calculated based on the system currency registered in System settings.

If you use a functional currency, you must specify both a contract currency and a functional currency, as these can deviate from the system currency. If you use multiple functional currencies, the system currency is empty. If you use a functional currency in Planon, we advise you to always specify both fields and not leave them both empty.

If both currency fields are populated, the accounting commitments are calculated in two sets: one set based on the contract currency and one set based on the functional currency ((see Accounting commitments).

Discount rate (%)

Enter a number which indicates the percentage of the rate of return on the lease amount. You can also enter a negative discount rate.

Discount rate for restoration costs

The selected discount rate for restoration cost calculation.

Discount rate for lease

The selected discount rate for lease payment calculation.

Use discount rate table?

Indicates if the discount rate is provided by the discount rate table or that it is filled in manually.

Initial direct costs

Specify the costs which are (expected) to be made at the time of starting the contract. These costs will be added to the initial right-of-use asset for the lessee.

Postings are created for amounts that are registered as initial direct costs. Note that these amounts are registered as account payable.

Initial installation costs (GASB87 only)

Specify the initial installation costs. These are one-off costs, made prior to the lease. The costs are added to the right-of-use, because they are part of the investment in the lease.

Lease incentive

Specify the amount for the lease incentive. This amount will be subtracted from the initial right-of-use asset for the lessee.

Postings are created for amounts that are registered as lease incentive. Note that these amounts are registered as 'account payable' (although it is a 'receivable').

Prepayment

If the first payment for the contract line is made before the official start of the lease, register the corresponding amount here. As a prepayment is registered and paid before the lease starts, it is included in the 'Right of use', not in the 'Liability'. The prepayment is registered in the postings under fixed account code Prepayment before start of contract.

Upfront non-refundable payments

Prepayment as a fixed payment that is not linked to the regular rent payment obligation for the lessee, using additional logic (Upfront non-refundable payments).

Prepayment date

Enter the date the prepayment was made.

Depreciate property

Depreciation is only calculated for the lessee and only if this field is set to Yes. If set to No, a balance posting is created for the property at asset return. The property is booked against the fixed account PROP_DEPRL (Property depreciation loss).

Note that the Depreciate property field is only accessible for inactive financial lease contract lines for lessees. In all other lease contract cases, this field is read only.

Restoration costs

Specify the costs which are (expected) to be made at the time of ending the contract, for example to restore a property or an asset back in its old state. You can add restoration costs at the start of the contract, but you can also add or modify these costs during the term of the contract. The restoration costs and the corresponding discount rate will be taken into account when calculating the RoU (right-of-use) asset for the lessee.

Restoration costs are recalculated if the contract's end date changes. The end date of a contract may change after:

The restoration costs are then recalculated based on the new changed end date. The effect of restoration costs on the right-of-use is shown in accounting commitments of type ARO.

Discount rate for restoration costs

Enter a number which indicates the percentage of the rate of return on the restoration costs. You can also enter a negative discount rate.

Fair value

Estimate what the value of the asset is at the beginning of the lease.

Total minimum lease payment

Displays the value for the total minimum lease payment. Depending on the value, the contract can be classified as finance lease or operating lease (only applies to the old accounting standards and to lessor cases).

Economic life span

Select a period that indicates the economic life span of the asset (as an estimate).

The value of the economic life span should always be greater than the contract line period value. If it is not, a warning message will be displayed.

If the warning message is ignored, the economic life span value will be taken into account while calculating depreciation.

Guaranteed residual value

For the consequences of the assets, see Guaranteed residual value.

For lessee perspective: enter the amount that will be paid at the end of the lease, when the residual value of the asset is lower than the guaranteed value. It is included in the lease liability.

For lessor perspective: enter the amount of the guarantee that will be received at the end of the lease, as a complete intrinsic residual value of the asset or a lower one compensated by a payment from the lessee. It is included in the lease receivable.

If you change the amount of residual value of a contract line that is already active, the lease liability and ROU asset, or lease receivable of the remaining period are recalculated. The new amount is taken into account from the moment the value has been changed.

Unguaranteed residual value

For the assets, see unguaranteed residual value.

Only for lessor perspective, enter the amount of the residual value of the asset that is no guaranteed by the lessee. It’s included in the lease receivable.

For lessee perspective, the amount entered is not part of any calculation.

Short term lease?

A short term lease is a lease that, at the date of commencement, has a maximum possible lease term, including options to renew or extend, of 12 months or less. For ASC842 operating leases, you can change the Short term lease? setting to determine how operating leases are calculated. For IFRS16 leases or finance leases, this setting is determined by Planon and cannot be overruled by users. When modifying the End date, Contract type and Accounting standard fields, the Short term lease? field is automatically calculated and set by Planon. Changes made by the user are overwritten by the system.

Low value asset

(IFRS only)

For IFRS 16 - Lessee, this field will be taken into account for the classification. If set to Yes the classification should be 'operating lease, off balance'.

Contract type - strict

Contracts can be classified as operating lease or finance lease. Classification is calculated and validated by Planon. This field displays the classification as calculated by Planon.

Classification confirmed by / Reason for classification

If the classification determined by the system differs from the classification specified by you, Planon asks you to fill in:

Option detail

This calculated field provides an overview of all lease contract options of the selected contract and displays this information on the contract line.

The overview indicates which options are included (reasonably certain) / excluded (not reasonably certain) from the lease.

Ratio of contract period and economic life span

(IFRS / FASB)

The ratio value is calculated and displayed automatically.

Ratio of total minimum lease payment and fair value

(IFRS / FASB)

The ratio value is calculated and displayed automatically.

Payments for lessor, to satisfy residual value guarantee?

(FASB only)

This option can be set to Yes or No and is taken into account when classifying the contract line.

Does third party exceed fair value underlying asset?

(FASB only)

Select Yes/ No as required. This is taken into account when classifying the contract line.

Bargain option

(IFRS / FASB)

Select Yes to indicate that a bargain purchase option is included.

Executory costs

Recurring costs in a lease, such as insurance, maintenance and taxes for the leased property paid by the lessee or lessor.

Should fair value risks accrue to the Lessee?

(IFRS / FASB)

If you select Yes, this indicates that the fair value risks accrue to the lessee and the contract is a finance lease. If you select No, the contract is an operating lease.

Should the secondary lease period be substantially below market rates?

(IFRS only)

If you select Yes, this indicates that the lessee has the ability to continue the lease for a secondary period at a rent that is substantially lower than market rent. This classifies the contract as a finance lease. If you select No, the contract is an operating lease.

Gross investment

Enter the value of the investment before depreciation is deducted.

Balance sheet offset

This field stores the calculations of migrated contracts. It is used for operating lease only.

Specialized nature

(IFRS / FASB)

Selecting Yes indicates that the asset is of a specialized nature, hence, the related contract is a finance lease

Transfer ownership

(IFRS / FASB)

Selecting Yes indicates that the ownership of the asset can be transferred. Hence, the related contract is a finance lease.

FL classifying criterion 1?

FL classifying criterion 2?

These two criteria fields can be used for the classification of a finance lease. If one of these fields has the value Yes, the Contract type-strict setting is set to Finance lease.

Lease accounting transition

Select the transition definition based on which the contract lines will be transitioned to the new lease accounting standard. For more information on defining transition definitions, see Defining a transition definition.

Transition contract line

If a new contract line is created based on a transition, the two contract lines (old standard and the new standard) are linked through this contract line reference.

Offset remainder for transition

Stores the open accrual when transitioning (required for the Modified Retrospective transition).

Offset fields

These fields store the calculations of migrated contracts.

The Initial accounting commitments and Depreciation fields are used for the initial calculations after migration. The remaining offset fields are used for storing the additional calculations after activating the contract.

For more information on migrating contracts, see Migration of contracts based on lease accounting

.

Offset transition ROU

Enter the difference in right-of-use when transitioning with the Modified retrospective with right of use based on full retrospective (MR&FR) method.

Offset - FC transition ROU

Enter the depreciation in the functional currency on the transition line.

Offset - accumulated depreciation

Enter the open accumulated depreciation amount for the migrated line.

Offset - FC accumulated depreciation

Enter the functional currency value of the open accumulated depreciation for the migrated line.

Offset liability

Enter the liability amount on the transition line.

Offset liability FC

Enter the functional currency liability on the transition line.