Concatenate Footnote Lease For Free

The lessor reports the lease as a leased asset on the balance sheet and individual lease payments as income on the income and cash flow statements. The lessee reports the lease as both an asset and a liability on the balance sheet due to their stake as a potential owner of the asset and their required payment.

In operating leases, lessors record lease income on a straight-line basis over the lease term. A lessor should recognize variable lease payments in the period in which they are earned for a lease classified as sales-type, direct financing, or operating.

The lessor reports the lease as an asset on the balance sheet and reports the individual lease payments as income statement revenue. He also considers the depreciation of his assets over time.

Accounting for a finance lease has four steps: Record the present value of all lease payments as the cost of the lease. Record only the interest portion of each payment as an expense. Depreciate the recognised cost of the asset over its applicable life. Recognise the asset's disposal upon its retirement.

Under ASC 842, a lessor excludes from the consideration in the contract, and therefore from lease payments, most variable payments related to the use of the asset (such as the volume of electricity generated by a solar farm).

The new lease standard increases the scope and complexity of the financial statement footnote disclosure with additional requirements for both quantitative and qualitative disclosures. While providing useful information, using a spreadsheet to create these disclosures becomes far more difficult than before.

For operating leases, the lessee should disclose the payments which he is committed to make during the next year, analysed between those in which the commitment expires within that year, in the second to fifth years inclusive and over five years from the balance sheet date, showing separately the commitments in respect ...