The Operating Leases Verification report is primarily intended for auditing purposes. Under ASC 842, the depreciation is a derived number, comprising a combination of the change in liability and accrued interest, depreciation of initial direct costs, amortization of lease incentives and other asset adjustments, and the difference between cash and straight-line accrual of rent (excluding non-lease components and executory costs). The lease cost is the sum of depreciation plus imputed interest (the portion of the rent that is not liability reduction), adjusted for prepaid or deferred rent. Given the number of items potentially involved, EZLease provides this report to break out each item separately. Since this is a report primarily intended for calculation review, it is provided only in spreadsheet format.
If a lease starts or ends during the report period, its values at the start or end date are shown on this report. Therefore, if there are leases which start or end, the total beginning or ending balance will not match the beginning or ending balance of the period on a regular report. However, you can filter out such leases using the Period Add and Period Term columns (exclude all non-blank entries to get beginning or ending balances).
If a lease has a specified gross asset, depreciation is calculated straight-line over the lease term (starting from the transition date, if the lease was active before then). The depreciation is then not based on the other calculations. Such leases are included on the report, but the values for calculating the accumulated depreciation are shown in italics to indicate that an alternative calculation method is used.
Note: This report is not available for IFRS and GASB users, since they have no such leases.
Short term leases are excluded from this report, as there is nothing to verify - no Accumulated Amortization or Lease Cost.
Accumulated Depreciation Beginning Balance
The beginning balance of the accumulated depreciation is equal to the Right-of-Use asset, plus initial direct costs (IDC), lease incentives, and asset adjustments, minus accumulated depreciation on IDC, incentives, and adjustments (recognized straight line over the life of the lease), minus the liability beginning balance (including accrued interest), plus the deferred rent balance due to rent leveling, plus the deferred/prepaid rent balance (when the date is in the middle of a rent payment period). If a lease starts during the period, “beginning balance” means the amount at lease inception. “Reported” shows what is on all reports. “Calculated” is a calculated column using the previous columns; you can see the formula used.
Accumulated Depreciation Ending Balance
The ending balance is calculated similarly to the beginning balance, based on amounts at the end of the report period. If a lease is reversal terminated, all numbers are zeroes. If it terminates due to normal expiration or early termination, the values are as of the termination date.
Operating Lease Cost
The lease cost is depreciation (the change in accumulated depreciation) plus imputed interest. The “rent adjustments” column is rarely used; it primarily applies to a reversal of an ASC 842 lease that started before the ASC 842 transition date, in which case FAS 13 operating rent must be reversed in the lease cost account.
Your report title
Enter any title you want to give to the report. The type of report is always displayed at the top left corner; you can use this title to describe the report (such as “Period 2, Midwest Division”).
Type of leases to use
You may limit the report to just the capital leases, just the operating leases, or use both (the default). This option is not displayed for reports that include only capital or only operating leases. If a lease is part-capital, part-operating, the appropriate portion is included if you choose one or the other.
Group of leases to use
You may choose All leases, a Group of leases starting with the same character(s), or a Single lease. If you choose Single lease, a popup displays the leases in the file; choose the one you want. If you choose Group, you are prompted for the beginning character(s) to search for.
You can create a text report that displays on the screen (and which can then be exported in HTML, PDF, Rich Text Format (.rtf), Microsoft Word® (.doc), Microsoft Excel® (.xls), and Crystal Reports (.rpt) formats). Please note that the Excel output exported from a text report is laid out the same way as the text report, which is generally not well-suited for sorting and otherwise manipulating the data inside Excel. If you export a text report, please wait for the “Export completed successfully” message to display before continuing with EZLease.
You can also create spreadsheet output. This is specifically designed to manipulate inside a spreadsheet program; each account of a journal entries transaction is displayed on a single line, so you can select, sort, and sum results. The same information is provided as on the text report, but the layout is considerably different to facilitate data manipulation. If you select spreadsheet output, you are prompted to specify an output filename.
In System Options, you can select whether the spreadsheet output should be generated as an Excel .xls file, or as an XML-format spreadsheet. Output in Excel format requires that you have a licensed copy of Excel on your computer.
Enter the beginning day of the first period of the report.
Select Fixed if you want one or more whole calendar periods: months, quarters (3 months), years, or 28-day periods. Select Fiscal to use fiscal periods (calendar months or 4- or 5-week periods based on your company’s calendar). Select Variable if you want to enter each report end date.
If you choose Fixed, select which type of period (months, quarters, years, or 28-day periods) and how many of those periods you want. The end date of the last report period is automatically calculated and displayed. The default is 1 month. You may enter up to 999 periods.
If you choose Fiscal, the fiscal date pattern you specified in System Options is used. Specify the starting fiscal period, then whether the report period(s) should be a single fiscal period each, a fiscal quarter, or a fiscal year. The start and end dates for the entire report are shown immediately below. The default is the current fiscal period.
If you choose Variable, you may enter any number of end dates. If you wish to enter more than one date, press Enter once you have completed a date entry, and another date appears. Dates are immediately sorted if you enter a new date that is earlier than the previous date. To delete a date, click on it to highlight it, then press Delete.
Click this button to get a secondary screen which allows you to select special groups of leases and temporarily capitalize operating leases.