IV95963: Issues with lease partial payments and massive values


In TRIRIGA 10.5.2, the following issues have been seen:

  • (1) When capital leases start and end in the middle of a Semi-Annual, Annual, Quarterly, or Monthly payment period, the first and last period amortization in the fiscal line item (FLI) is not prorated correctly. As a result, the Day 1 right of use (ROU) is incorrect.
  • (2) Massive amounts are appearing in the Capital/Finance Schedule. The Interest Expense, Change in Liability Value, P&L Book Expense, Liability Value, and Net Equity fields are displaying massive amounts, like in the quintillions, even though the total rent is $240K.

We needed to fix the partial payment issue for the current and new lease accounting standards. Moving forward, we fixed an issue that when capital leases start and end in the middle of a Monthly, Quarterly, Semi-Annually, Annually payment period, the first and last period amortization in the FLI is not prorated.

[Admin: To see other related posts, use the Payments tag.]

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Verdantix: Who are benefiting from the changes in lease accounting?


In early 2016, the US Financial Accounting Standards Board (FASB) and the International Financial Accounting Standards Board (IASB) issued new lease standards, which require companies to include lease obligations in their balance sheets. The new standards take affect 1 January 2019 and will impact all companies that have leases for real estate or equipment and file financial statements…

For many years, IWMS software providers have provided real estate, leasing, and portfolio capabilities, which include modules that integrate details of leases and contracts with existing financial and accounting systems to provide a central database for real estate financial planning and analysis and to create the correct entries for the accounting system. The new FASB/IASB accounting standards bring the spotlight on the role of software in managing leases.

A review of the deals in the public domain shows that providers such as Accruent, Lucernex, and Qube are already swooping in on opportunities to help companies mitigate risk by ensuring compliance to these new leasing standards. In the last few months, Lucernex has announced several new contracts with retailers such as Bouclair, DXL, Bashas’ Family of Stores and Suburban Propane. Accruent has been selected by CTIL, Tillys and Sephora in just the last few weeks. We are also witnessing other IWMS vendors improving their capabilities for accurate lease calculations in accordance with the new lease accounting standards. For example, in April, Planon software received validation from a Big Four accounting firm that its leasing calculations engine was in accordance with the IASB/FASB requirements…

[Admin: This post is related to the 08.01.16 post about the competitors of IBM TRIRIGA. To see other related posts, use the FASB tag or IFRS tag.]

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IV96394: Revision to ROU asset when modifying “Finance” RE lease


When a “Finance” (or “Capital”) lease is modified, the new ROU asset balance should be calculated in the same way as future accounting “Operating” lease modifications, that is, the amount of change in the liability balance is added to (or subtracted from) the prior-period ROU asset balance immediately preceding the modification.

Note that this calculation should mirror the calculations that were implemented in TRIRIGA 10.5.2 for future “Operating” lease modifications. Currently, we see that the asset balance is set equal to the re-measured liability balance upon a modification.

Moving forward, when a “Finance” (or “Capital”) lease is modified, the new right-of-use (ROU) asset balance is now calculated correctly. The amount of change in the liability balance is added to (or subtracted from) the prior-period right-of-use (ROU) asset balance immediately preceding the modification.

[Admin: To see other related posts, use the ROU tag.]

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IV96316: Initial liability carryover balance is not applied


For TRIRIGA 10.5.2/3.5.2 OOB, there is an issue with the “Initial Liability Carryover” (ILC) field. In both operating leases and capital leases, when a value is entered in this field, the right of use (ROU) asset in the future accounting schedules is not reduced at Day 1 (against lease liability (LL) and initial direct costs (IDC)).

  • What should happen: Day 1 ROU = Day 1 LL + IDC – Initial Liability Carryover.
  • What is happening now: Day 1 ROU = Day 1 LL + IDC. (No ILC is applied.)

The balance in this ILC field should get pulled into the Day 1 ROU asset balance, and it currently does not. If this field is functioning per OOB, then we need to fix it. It is critical that the transition to the new accounting standards is calculated correctly.

The initial carryover balance (ICB) was not applied to new accounting schedules. Moving forward, if leases are created on or after the look-back period, the initial carryover balance will now be applied to operating leases and finance/capital leases.

[Admin: To see other related posts, use the ROU tag.]

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CoStar: What is the CoStar Data Connector for Lease Accounting?


We have a number of existing enterprise TRIRIGA customers who are retaining their lease data in TRIRIGA (their investment), but using a connected, low-cost, cloud-based solution for lease accounting. The good news is that it works, it’s easy, it’s lower cost, and in production today with Fortune 100 customers with large TRIRIGA investments. Let me know if you have an interest in moving into a lease accounting solution in a low-cost way, while preserving your TRIRIGA investment.

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CoStar Lease Accounting Setup for ASC 842 and IFRS 16 Compliance

  • 1. Connect existing lease management systems with our proprietary Data Connector. You can retain investments in existing lease systems and take advantage of our proven lease accounting functionality while avoiding the costs of upgrading enterprise software.
  • 2. Migrate all existing lease data with our integrated Lease Administration System. You can upgrade existing systems to the smart choice for lease accounting and management, provide access to an unlimited amount of organizational users and departments, and save on long-term costs associated with multiple systems and upgrades.

[Admin: To see other related posts, use the FASB tag or IFRS tag.]

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IV96297: Payment schedule changes accounting type from AR to AP


Our customer needs to understand: When creating payment schedules, why are the payment line items (PLI) tagged with an account type of Accounts Payable (AP) while the lease is tagged as Accounts Receivable (AR)?

Review the lease, and open a payment schedule. Note that the accounting type was changed to Accounts Payable (AP). As soon as you save the payment schedule with Accounts Receivable (AR), it also changed back to Accounts Payable (AP).

Moving forward, we fixed an issue with the “Generate Payment Schedule”, where the system changes the accounting type of Accounts Receivable (AR) to Accounts Payable (AP). When the payment type is “Incentive”, then the system automatically changes it to Accounts Receivable (AR).

[Admin: To see other related posts, use the Payments tag.]

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Planon: How can RE managers take control of their RE portfolios?


In principle, every organisation is made up of four production factors: the capital, the people who work there, technology, and information (data). The real estate manager’s role in the organisation is becoming steadily more significant, partly because of the disruptive changes in Corporate Real Estate. One might suggest that real estate can now be regarded as the fifth production factor. How does a real estate manager gain control over his biggest cost item: the real estate portfolio?

Striking a balance

As a new and fifth production factor, real estate plays an important role in your organisation. Did you know that Corporate Real Estate (CRE) represents on average around 20-25% of a balance sheet? That 60% of organisations lack transparency in their real estate portfolios? And that no fewer than 2 out of every 3 real estate managers lack control over their real-estate-related processes? It’s up to the real estate manager himself to make a positive change to these statistics, and to tackle the challenges that lie ahead

The world is changing

From 1 January 2019, publicly listed companies are required to include on their balance sheets any rental contracts that run for longer than a year. With the introduction of the new lease accounting standards, the debt position on your balance sheet could rise by up to 20%. These new regulations therefore exercise a direct influence over your portfolio strategy. Accurate administration, reliable calculations and compliant reports are an absolute necessity. The need to regain control over your real estate will be made all the more urgent by the disruptive changes currently occurring in the world around us…

[Admin: To see other related posts, use the Planon tag or Leases tag.]

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