If the scope of a lease is reduced, the portion of the lease that applies to the reduction is considered early terminated. “Reduction in scope” includes a reduction in the asset(s) being leased; for IFRS 16 and GASB 87, it also includes a reduction in the lease term.
For a partial termination, revise the lease with the new terms (including the reduced rent and any other adjustments). On the Inception tab, at the bottom, if the amount of asset leased is reduced, set the Underlying Asset Scope to Decreased. EZLease determines a reduction in lease term for IFRS and GASB 87 automatically. On the revision booking date, EZLease recognizes a reduction in asset and liability. For ASC 842 or GASB 87, you can either specify the remaining percentage amount of the right of use asset, or allow EZLease to calculate it as the same as the percentage remaining of the liability. For IFRS 16, you are required to enter the remaining percentage of the asset. A gain or loss is recognized for the difference between the reductions in asset and liability.