Release 9.0 - April 2023

Scenario: A full impairment was applied to a lease at inception or in its first month. The JE report showed "Allowance for Impairment" twice, resulting in an imbalance error.

Impact: Impairment is now properly reported.

Correcting entry: None, because error was previously reported.

Scenario: A GASB 62 capital lease has executory costs, and a different amount of non-lease components. EZLease was continuing to report the executory costs after transition to GASB 87.

Impact: Post-transition liability was incorrect, along with related recalculation of asset and breakout of rent. EZLease now properly uses non-lease components for post-transition accounting.

Correcting entry: This impacts retrospective accounting. The user needs to post an adjustment entry to ensure all YTD balances are accurate.

Scenario: If an ASC 842 operating lease has executory costs (carried over from ASC 840) or non-lease components equal to the rent in the final rent step, the current liability is miscalculated for the 12 months before that step starts (when the long term liability should be zero).

Impact: EZLease reported an out of balance error for current liability, and the long term liability beginning balance doesn’t match the prior period’s ending balance if multiple periods are included. EZLease now properly reports that all liability is current.

Correcting entry: No adjustment entry required as the earlier version of EZLease was reporting an error.

Scenario: If an ASC 842 operating lease has a lease incentive and is revised, EZLease was reporting a termination gain equal to the unamortized incentive.

Impact: EZLease now reports no termination gain due to lease revision.

Correcting entry: This impacts retrospective accounting. The user needs to post an adjustment entry to ensure all YTD balances are accurate.

Scenario: If a short term lease was extended for a year or less, but the combined life from the original begin date was more than a year, EZLease was incorrectly classifying the lease as no longer short term (finance or operating).

Impact: Lease after revision was incorrectly classified. EZLease now properly maintains short term classification.

Correcting entry: Any lease affected must be reclassified. After reclassification, the user needs to post an adjustment entry to ensure all YTD balances are accurate.

Scenario: If a lease is revised so that no more rent is due after the revision date, EZLease was still showing outstanding liability and reporting an error.

Impact: EZLease now properly shows no liability after a revision if no rent remains.

Correcting entry: No adjustment entry required as the earlier version of EZLease was reporting an error.

Scenario: If an ASC 840 operating lease has an asset adjustment, and the ASC 842 transition date is in the middle of a rent payment period, running a JE report for the transition date results in an out of balance error.

Impact: The transition transaction is now properly calculated.

Correcting entry: No adjustment entry required as the earlier version of EZLease was reporting an error.

Scenario: If a GASB 62 capital lease transitions to GASB 87, then is revised before the start of a report, the beginning balances of the ROU asset and accumulated amortization were incorrect.

Impact: EZLease now properly calculates the asset values.

Correcting entry: This impacts retrospective accounting. The user needs to post an adjustment entry to ensure all YTD balances are accurate.

Scenario: If the System Option "Report lease incentives separately from rent (FAS 13)" was checked and an operating lease had incentives, EZLease reported an imbalance error when running post-transition.

Impact: EZLease now properly ignores the option setting after transition to ASC 842/IFRS 16/GASB 87.

Correcting entry: No adjustment entry required as the earlier version of EZLease was reporting an error.

Scenario: If user classified a lease as Short Term and then revised it to extend its life more than a year, EZLease allowed Short Term classification for the revised lease.

Impact: EZLease now blocks an attempt to classify a lease as Short Term if it is more than 12 months long.

Correcting entry: Reclassify any lease that was misclassified. This impacts retrospective accounting. The user needs to post an adjustment entry to ensure all YTD balances are accurate.

Scenario: If a lessor lease is revised with a shortened end date and the classification changes from finance to operating or vice versa, so that a new lease needs to be created, the economic life is reduced by the change in lease term, which can cause the classification to be switched incorrectly back to what it was.

Impact: EZLease now properly adjusts the economic life based only on the change in begin date.

Correcting entry: Reclassify any lease that was misclassified. This impacts retrospective accounting. The user needs to post an adjustment entry to ensure all YTD balances are accurate.

Scenario: If an ASC 842 operating lease has executory costs (carried over from ASC 840) or non-lease components equal to the rent in the final rent step, the current liability is miscalculated for the 12 months before that step starts (when the long term liability should be zero). EZLease reports an out of balance error for current liability, and the long term liability beginning balance doesn’t match the prior period’s ending balance if multiple periods are included.

Impact: Current liability is now properly calculated and long term liability is zero.

Correcting entry: This impacts retrospective accounting. The user needs to post an adjustment entry to ensure all YTD balances are accurate.

Scenario: If a short-term lease was revised, and the remaining term was less than 12 months but the total term was more than 12 months, EZLease incorrectly treated the lease as not short term.

Impact: Such a lease is now recognized as continuing short term when revised.

Correcting entry: Reclassify any lease that was misclassified. This impacts retrospective accounting. The user needs to post an adjustment entry to ensure all YTD balances are accurate.

Scenario: If an ASC 842 operating lease with a lease incentive is revised, a termination gain was reported equal to the unamortized incentive and the ROU asset was increased by the same amount.

Impact: No termination gain is now reported. ROU asset change is based solely on the change in liability.

Correcting entry: This impacts retrospective accounting. The user needs to post an adjustment entry to ensure all YTD balances are accurate.

Scenario: If a GASB lessor lease has a transfer addition but its original begin date is before transition to GASB 87, the deferred flow of resources added doesn't match the equivalent transfer termination and a fund balance adjustment is incorrectly reported.

Impact: Calculations are now correct.

Correcting entry: This impacts retrospective accounting. The user needs to post an adjustment entry to ensure all YTD balances are accurate.

Scenario: If a GASB customer sets the GASB 87 application date earlier than the implementation date (for restatement of comparable years), EZLease test for a short term lease counted 12 months from the application date rather than from the lease begin date.

Impact: Short term determination is now properly based on the lease begin date for all leases.

Correcting entry: Reclassify any lease that was misclassified. This impacts retrospective accounting. The user needs to post an adjustment entry to ensure all YTD balances are accurate.

Scenario: If an ASC 842 operating lease has lease incentives, initial direct costs, or deferred rent rollover, and was revised such that the lease converted to finance, the new finance lease was set up with the full adjustment recognized again (double-counting).

Impact: ROU asset was misstated for the revised, now finance, lease.

Correcting entry: This impacts retrospective accounting. The user needs to post an adjustment entry to ensure all YTD balances are accurate.

Scenario: If an ASC 842 lease was in the last 25% of its economic life at time of revision, EZLease was not considering the economic life test as operating.

Impact: A revised lease could be considered finance when it should be operating.

Correcting entry: Reclassify any lease that was misclassified. This impacts retrospective accounting. The user needs to post an adjustment entry to ensure all YTD balances are accurate.

Scenario: If an ASC 842 operating lease has a partial impairment, the Operating Leases Verification report incorrectly calculated the accumulated amortization for the last month of the lease and reported a mismatch error.

Impact: For all periods after an impairment, the "Calculated" columns of the Operating Leases Verification report shows "Impaired," because the accumulated amortization balance cannot be calculated based on the formula used without impairment.

Correcting entry: Booking reports (journal entries, IS/BS) are correct before and after this fix, as is Reported column in Verification report. No corrections necessary (aside from ignoring miscalculated value).

Scenario: If a GASB lessor lease starts before transition, is revised before transition, and the transition happens before the start of the report, the transition is not properly processed.

Impact: Reports that include the transition date were correct; those starting later now have correct asset and liability.

Correcting entry: This impacts retrospective accounting. The user needs to post an adjustment entry to ensure all YTD balances are accurate.

Scenario: GASB lessor lease with guaranteed residual shows spurious termination gain in month of expiration, which results in out of balance error on journal entries report.

Impact: Termination gain is now zero.

Correcting entry: Since the journal entries reported an error, and the problem happened in the last month of a lease, no incorrect entries would have been booked.

Scenario: If a GASB lessor lease is revised with a reduction in term and an increase in rent, the journal entries report is unbalanced (the deferred inflow reduction due to the reduction in term is not recognized).

Impact: Journal entries report is corrected. Income Statement/Balance Sheet report was always correct.

Correcting entry: Since the journal entries report would have given an error, but the underlying calculations were correct, no corrections are required.

Scenario: If a GASB 87 lessor lease has a reasonably certain purchase option (RCPO), the purchase price (shown in the Guaranteed Residual field) should not be included in the receivable. It wasn't excluded.

Impact: Guaranteed Residual/Purchase Price is now properly excluded from receivable.

Correcting entry: This impacts retrospective accounting. The user needs to post an adjustment entry to ensure all YTD balances are accurate. To reset the beginning receivable displayed on the on-screen lease record, you must edit the lease record (such as changing the economic life and then setting it back to what it was) and save it, choosing Replace.

Scenario: If a GASB user chooses (in System Options) to display more than 5 years separately in the minimum rent report, values shown after 5 years are incorrect.

Impact: Grouping is now done correctly with larger numbers of separate years.

Correcting entry: Replace previously run future rent commitment report with new results.

Scenario: If a report is run that ends exactly one year before the end of a lease with a guaranteed residual or payments in arrears, the residual is considered long-term rather than current liability.

Impact: The residual value or final rent payment in arrears is now considered current liability.

Correcting entry: Adjust current vs. long term liability (or receivable, for lessors) split. Total liability is unaffected. Only affects reports ending exactly one year before, or beginning one year minus one day, before lease termination.