Registering a sublease

Core TSIs : Lease Accounting : Working with lease accounting : Registering a sublease

For finance leases, you can register a sublease. The part that is subleased is specified as a percentage of the headlease.

When required by the accounting standard (IFRS 16 and IPSAS 43) Planon uses this percentage to calculate the right-of-use that is derecognized from the headlease and transferred to the sublease.

Procedure

1. In the Contracts TSI, go to the Contracts selection level.

2. Select the headlease contract and contract line for which you want to define a sublease contract.

3. On the action panel, click Add sub.

A subcontract is created.

4. Complete the relevant fields in the data panel. For more information on the available fields, see the Contracts documentation.

• Planon automatically populates the accepting contracting party of the headlease as offering contracting party of the sublease.

• The Payment contract? field of the sublease contract is set to No by default.

5. Click Save.

You have now created a subcontract. You can add contract lines to the subcontract in which you define the details of the sublease. For more information on the available fields, see Contract line fields for lease accounting.

After activating the sublease contract:

◦ A proportional part of the right-of-use asset of the headlease is transferred to the sublease. This is calculated and stored as Unguaranteed residual value of the sublease.

◦ At the end of the sublease, that Unguaranteed residual value of right-of-use asset is transferred back to the headlease.

◦ Planon generates an accounting commitment of the type SL, Sublease at the start of sublease, change of headlease or sublease and end of sublease (see Accounting commitment types).

◦ The corresponding postings are created at closure.

• A sublease contract can only be activated after the headlease contract is activated.

• During the term of a sublease, the proportional result of a headlease amount change is added to the Unguaranteed residual value of the sublease. However, if a headlease amount change is caused by a CPI index change, only the proportional part related to the remaining term of the headlease after the sublease ends is registered on the Unguaranteed residual value of the sublease, the difference is directly registered as gain/loss (GALO) (See Indexing a headlease.