Revise Formula Lease For Free

(b) A lessee would reassess variable lease payments that depend on an index or a rate only when it is reassessing the lease liability for other reasons (for example, when there is a change to the lease term upon the occurrence of a significant event or a significant change in circumstances within the control of the ...

Account for the lease modification as a termination of the original lease and creation of a new lease from the effective date of the modification. Measure the carrying amount of the underlying asset as the net investment in the original lease immediately before the effective date of the modification.

Lessees are required to reassess the lease liability discount rate when, subsequent to lease inception, there is a change to the lease terms or scope and the changes are not accounted for as a separate lease or contract.

A lessee is required to reassess the lease term on the occurrence of a significant event or change in circumstances that is within its control and directly affects whether it is reasonably certain to exercise (or not to exercise) an option included in the original contract.

Reassessment of the lease after the commencement date is required by a lessee if there is a change in the lease term, or on lessee's assessment of whether it would reasonably be certain to exercise a purchase option.

Lease modification: A change in the scope of a lease, or the consideration for a lease, that was not part of the original terms and conditions of the lease (for example, adding or terminating the right to use one or more underlying assets, or extending or shortening the contractual lease term).

Reassessments are required when an event does not involve renegotiating the lease terms and conditions, but when facts, assumptions, or other circumstances change. For example, a lessee may change their decision about exercising an option within a lease.