The Footnote Disclosure provides financial statement users sufficient information to assess the amount, timing, and uncertainty of cash flows arising from leases. LeaseCrunch software provides the quantitative information required by ASC 842. The sections of the Footnote Disclosure are described below.
Note: In some instances, the Amortization Schedule should be run specific to lease classification (Select from the Classification dropdown at My Leases) or for the entire term of all leases to balance to Footnote Disclosure.
The Footnote Disclosure is generally run for a full reporting period, for example, January through December.
The first section of the Footnote Disclosure presents the Lease Expense information relevant to the reporting period for which the disclosure is generated. Typically, this report encompasses a full year's worth of data.
Amortization of ROU Assets: Amortization Expense for Finance Leases.
Amortization Schedule Column C (Amortization Expense, when run for Finance Leases)
Interest on Lease Liabilities: Interest Expense for Finance Leases
Amortization Schedule Column H (Interest Expense, when run for Finance Leases)
Operating Lease Expense: Lease Expense for Operating Leases
Amortization Schedule Column C (Operating Lease Expense), when run for Operating Leases
Variable lease expense: Variable expenses are entered on the Variable Expense & Non-lease Payments tab in add/edit leases. If no variable expenses are included on the Variable Expense & Non-lease Payments tab within the software, there will be no balance shown on the Footnote Disclosure.
Amortization Schedule Column V (Variable Lease Expense)
Notes: Since Operating Lease Expense and Amortization Expense use the same column on the Amortization Schedule, in order to tie the Footnote Disclosure and Amortization Schedule, the Amortization Schedule should be run for the lease classifications separately. Do this by selecting Finance Lease or Operating Lease from the Classification Dropdown on My Leases.
The cash flows section of the Footnote Disclosure is separated by lease classification so to verify with the Amortization Schedule, run the Amortization Schedule twice, once for operating leases and once for finance leases.
For finance leases, this is the amount of interest for the period excluding the last month of interest for the period when there are beginning-of-month payments.
Amortization Schedule Column H (Interest Expense), excluding last month when payments are made at the beginning of month.
After the transition year, this will include the interest accrual from the last month of the prior year and exclude the last month of the current year.
Example: 12/23 & 1/24-11/24 interest expense.
For finance leases, this is the cash payment amount less the interest paid for the same period.
Amortization Schedule Column J (LT Liability Payment at BOM) + K (LT Liability Payment at EOM) less Operating cash flows from finance leases(interest accrued)
For operating leases, this is the payments made during the period.
Amortization Schedule Columns J (LT Liability Payment at BOM) + K (LT Liability Payment at EOM)
The ROU Assets obtained in exchange for new lease liabilities is the sum of new liabilities created for leases created in the period.
Amortization Schedule Column G (LT Liability Beginning)
When there are revisions, the easiest way to tie this out is to run the Amortization Schedule for the current fiscal period and check the box below GL Start date to "Include Data by Lease". On the Data by Lease tab, take the sum of the credit amounts in Column G.
The ROU Assets obtained in exchange for new lease liabilities is the sum of new liabilities created for leases created in the period
Amortization Schedule Column G (LT Liability Beginning)
When there are revisions, the easiest way to tie this out is to run the Amortization Schedule for the current fiscal period and check the box below GL Start date to "Include Data by Lease". On the Data by Lease tab, take the sum of the credit amounts in Column G.
This is calculated based on the discount rate for each lease and the remaining balance of the lease payments for each lease at the reporting date.
Download the Weighted Averages Template Here GOOGLE DOC LINK
The maturity analysis includes the undiscounted cash flows on an annual basis for the next five years, the sum of undiscounted cash flows for all years thereafter, and a reconciliation of the undiscounted cash flows to the discounted finance and operating lease liabilities.
Future Amortization Schedule, columns J (LT Liability Payment at BOM) + K (LT Liability Payment at EOM)
If this does not tie out, it is likely due to leases created after the GL End Date of the Footnote Disclosure or revisions created after the GL End Date of the Footnote Disclosure. Please reach out to support@leasecrunch.com with any additional questions.
