ctcLink Accounting Manual | 40.60.20 Right-To-Use Lease Agreements as Lessee
40.60.20 Right-To-Use Lease Agreements as Lessee
Right-to-use lease assets are to be capitalized at the value of the sum of the initial measurement of the lease liability, any ancillary charges, and/or lease payments made to the lessor at or before the commencement of the lease term, less any lease incentives received from the lessor at or before the commencement of the lease term.
Lessees should account for a lease as an acquisition and the incurrence of a liability:
- Recording the lease asset and lease liability at its inception,
- Updating the DebtBook Tool,
- Separating periodic payments into principal and interest portions,
- Applying payments to the correct object of expenditure, and
- Amortizing the lease asset
Amortization schedule example
The following amortization schedule from Debtbook is the basis for the amounts in the illustrative entries and instructions in Section 40.60.20.1
Basic Entity General Information
| Field | Information |
|---|---|
| Fiscal Year-End | 06/30 |
| Beginning of Restatement Period | 07/01/2021 |
| GASB 87 Implementation Date | 06/30/2022 |
| Lease Name | SRL 24-0012 |
| Lessee or Lessor | Lessee |
| Vendor Name / Lessee Name |
Key Dates
|
Field |
Dates |
|---|---|
| Lease Contract Date | 04/02/2024 |
| Contract Commencement Date | 10/01/2023 |
| Lease Start Date | 10/01/2023 |
| Lease End Date | 09/30/2028 |
| First Payment Date | 10/01/2023 |
| Second Payment Date | 11/01/2023 |
Lease Term
| Term | Months |
|---|---|
| Noncancelable Lease Term (in months) | 60 |
| Maximum Lease Term (in months) | 60 |
| Total Lease Term (in months) | 60 |
Lease Liability
Lease Start Date: 10/01/2023, SRL 24-0012
Lease End Date: 09/30/2028
| Date | Beginning Balance | Fixed Payments | Lease Payment | Principal Payments | Interest Expense | Ending Balance | Total Payment |
|---|---|---|---|---|---|---|---|
| 06/30/2024 | 2,039,731.64 | 335,844.00 | 335,844.00 | 287,113.93 | 48,730.07 | 1,752,617.71 | 335,844.00 |
| 06/30/2025 | 1,752,617.71 | 447,792.00 | 447,792.00 | 386,938.92 | 60,853.08 | 1,365,678.79 | 447,792.00 |
| 06/30/2026 | 1,365,678.79 | 447,792.00 | 447,792.00 | 402,141.85 | 45,650.15 | 963,536.94 | 447,792.00 |
| 06/30/2027 | 963,536.94 | 447,792.00 | 447,792.00 | 417,942.12 | 29,849.88 | 545,594.82 | 447,792.00 |
| 06/30/2028 | 545,594.82 | 447,792.00 | 447,792.00 | 434,363.18 | 13,428.82 | 111,231.64 | 447,792.00 |
| 06/30/2029 | 111,231.64 | 111,948.00 | 111,948.00 | 111,231.64 | 716.36 | 0.00 | 111,948.00 |
| Total | 2,238,960.00 | 2,238,960.00 | 2,039,731.64 | 199,228.36 | 2,238,960.00 |
Lease Asset
| Date | Beginning Balance | Amortization Expense | Ending Balance |
|---|---|---|---|
| 06/30/2024 | 2,039,731.64 | 305,959.75 | 1,733,771.90 |
| 06/30/2025 | 1,733,771.90 | 407,946.33 | 1,325,825.57 |
| 06/30/2026 | 1,325,825.57 | 407,946.33 | 917,879.24 |
| 06/30/2027 | 917,879.24 | 407,946.33 | 509,932.91 |
| 06/30/2028 | 509,932.91 | 407,946.33 | 101,986.58 |
| 06/30/2029 | 101,986.58 | 101,986.58 | 0.00 |
| Total | 2,039,731.65 |
40.60.10 Right-To-Use Lease Agreements << 40.60.20 >> 40.60.30 Right-To-Use Lease Asset (Lessor)
