“The date of the lease agreement or commitment, if earlier. For purposes of this definition, a commitment shall be in writing, signed by the parties in interest to the transaction, and shall specifically set forth the principal provisions of the transaction. If any of the principal provisions [is] yet to be negotiated, such a preliminary agreement or commitment does not qualify for purposes of this definition.”
“If a master lease agreement specifies that the Lessee must take a minimum number of units or dollar value of equipment and if all other principal provisions are stated, the inception of the lease is the date of the master lease agreement with respect to the specified minimum. The inception of the lease for equipment take-downs in excess of the specified minimum is the date that the Lessee orders the equipment because the Lessee does not agree to lease the equipment until that date. To the extent that lease payments for required take-downs are based on value at the date of the take-down, the lease, in effect, has a preacquisition period escalator provision based on value. Paragraphs 8-10 of [FAS 23] address that situation. If a master lease agreement does not require the Lessee to take down any minimum quantity or dollar value of equipment, the agreement is merely an offer by the Lessor to rent equipment at an agreed price and the inception of the lease is the date that the Lessee orders the equipment.”
The inception of the lease is not always the same as the begin date. A lease agreement may be signed in advance of the start of the lease (the date the Lessee takes possession of the asset). In such a case, you should enter a booking date before the begin date of the lease; the lease will be included in future minimum rent commitment reports, but not on the primary financials.