Put your leases on the balance sheet correctly

Contract review identifies agreements that give the business control over the use of a specific asset for a period in exchange for payment. • Build an inventory of lease agreements and payment terms. • Identify embedded leases, rights to use assets within other contracts. • Assess control over the asset's use. • Classify leases as finance or operating, the two categories with different expense accounting. • Review ownership transfer, purchase options, lease length, payment value and whether the asset has another use. You receive the agreed lease inventory and documented classification decisions.

Opening calculations establish the asset and obligation recorded when a lease begins. • Calculate the lease liability, the current value of future lease payments. • Calculate the right-of-use asset, the recorded right to use the leased property or equipment. • Document the discount rate used to convert future payments to a current value. • Assess the incremental borrowing rate, the rate for borrowing over a similar term with similar security. • Prepare the agreed opening journal entries. You receive the agreed balance calculations, rate assumptions and opening entries.

Lease schedules track balances and expenses after the start date for businesses with continuing payment obligations. • Track amortization, the reduction of the recorded asset over the lease term. • Calculate interest and remaining payment obligations. • Review modifications and remeasurements, recalculations required by relevant changes. • Prepare the agreed recurring journal entries. • Prepare lease disclosures and a maturity analysis showing when payments fall due. You receive the agreed updated schedules, entries and disclosure materials on the agreed schedule.

The agreed scope can cover the lease inventory, initial implementation and ongoing schedule maintenance. • Review contracts and collect lease terms and payment data. • Document classification, rate assumptions and balance calculations. • Prepare the agreed entries and disclosures. • Process lease changes and maintain schedules. • Prepare supporting records for audit questions. You receive the agreed lease records, calculations, schedules and reporting materials.