Overview
Budgeted outgoings in a lease agreement are estimates of the expenses a property owner (lessors) will incur over a financial year and how those expenses will be allocated to tenants (lessees). Typically, the tenant pays their share of the budgeted outgoings over the course of the year. At the end of the year, the lessor reconciles the actual expenses against the budget, and then invoices (or credits) the lessee for the difference.
Accounting for budgeted outgoings in EZLease
If the amount owed for budgeted outgoings is known at the inception of the lease, you would enter it on the Main Data tab as Non-lease Components.
If the amount is determined after lease inception, it would be entered as a variable lease payment. Likewise, if the amount changes during the life of the lease, the difference would be entered as a variable lease payment.
In either case, the amount is not included in the calculation of the initial liability or ROU asset.
Related Links
Non-lease Components | Variable lease payments | Variable Lease Payments tab