Lease Engine (Coming Soon)#

IFRS 16 compliant lease accounting module for Right-of-Use (ROU) assets and lease liabilities.

Overview#

The AssetVault Lease Engine provides comprehensive lease accounting capabilities to help you comply with IFRS 16 (International) and ASC 842 (US GAAP) lease accounting standards.

Current Status: Beta - Try our demo calculator at /try-lease-engine

Full Module: Q2 2025 (planned release)

Try the Lease Calculator#

Experience lease accounting now with our demo calculator.

Access: Navigate to Try Lease Engine from the main menu

Features#

The demo calculator shows:

• ROU Asset calculation
• Lease Liability calculation
• Monthly amortization schedule
• Interest expense breakdown
• Depreciation schedule

How to Use#

Step 1: Enter Lease Parameters

1. Navigate to /try-lease-engine
2. Fill in lease details:
   • Lease Commencement Date: When lease begins
   • Lease Term: Duration in months
   • Monthly Payment: Fixed monthly amount
   • Incremental Borrowing Rate (IBR): Interest rate (%)
   • Payment Timing: Advance or Arrears
3. (Optional) Add:
   • Initial Direct Costs
   • Prepaid lease payments
   • Dismantling/restoration costs
4. Click Generate Schedule

Step 2: Review Results

The calculator displays:

Summary Panel:

• ROU Asset: Initial value (PV of payments + costs)
• Lease Liability: Initial liability (PV of payments)
• Total Payments: Sum of all lease payments
• Total Interest: Interest expense over lease term

Amortization Schedule: | Period | Opening Balance | Payment | Interest | Principal | Closing Balance | |--------|----------------|---------|----------|-----------|-----------------| | Month 1 | £XX,XXX | £1,000 | £XXX | £XXX | £XX,XXX |

Depreciation Schedule: | Period | Opening NBV | Depreciation | Closing NBV | |--------|-------------|--------------|-------------| | Month 1 | £XX,XXX | £XXX | £XX,XXX |

Step 3: Export or Save

• Click Export to Excel to download full schedule
• Click Save as Draft to store for later (coming soon)

Tutorial: Using the Lease Calculator

IFRS 16 Key Concepts#

Right-of-Use (ROU) Asset#

Represents your right to use the leased asset.

Initial Measurement:

ROU Asset = PV of Lease Payments
          + Initial Direct Costs
          + Prepaid Lease Payments
          + Dismantling/Restoration Costs
          - Lease Incentives Received

Subsequent Measurement:

• Depreciated over lease term (or useful life if shorter)
• Adjusted for impairment if applicable
• Reduced by depreciation

Lease Liability#

Obligation to make lease payments.

Initial Measurement:

Lease Liability = Present Value of Future Lease Payments

Discount Rate: Incremental Borrowing Rate (IBR) if implicit rate unknown

Subsequent Measurement:

• Increased by interest expense (using effective interest method)
• Reduced by lease payments made

Payment Timing#

Advance Payments:

• Payment at start of period
• Lower interest expense (less time to accrue)

Arrears Payments:

• Payment at end of period
• Higher interest expense (more time to accrue)

Short-Term Lease Exemption#

Leases ≤ 12 months can be expensed directly (optional).

In AssetVault:

• Track as simple expense (no ROU asset created)
• Or create ROU asset for full visibility

Low-Value Exemption#

Leases of low-value assets (e.g., laptops, phones) can be expensed.

Threshold: Typically £5,000 or less when new

Coming Soon: Full Lease Module#

Planned Features#

Lease Register:

• Central repository for all leases
• Lease details and documentation
• Status tracking (active, terminated, expired)

Lease Modifications:

• Handle lease amendments
• Recalculate ROU and liability
• Generate modification journals

Variable Lease Payments:

• Track contingent rents
• Index-linked escalations
• Usage-based payments

Lease Terminations:

• Early termination handling
• Gain/loss calculation
• Derecognition journals

Extension Options:

• Model probable extensions
• Reassess lease term
• Update liability and ROU

Purchase Options:

• Track purchase options at end of term
• Include in liability if reasonably certain

Subleases:

• Record sublease income
• Maintain gross lease in register
• Net income reporting

Dismantling Costs:

• Include in ROU asset
• Provision for restoration obligations
• Accretion of provision over lease term

Integration Features#

Journal Automation:

• Auto-generate monthly lease journals
• Interest expense
• ROU depreciation
• Payment application

Reporting:

• IFRS 16 disclosure reports
• Lease liability maturity analysis
• Lease expense breakdown
• Lease vs. owned asset comparison

Multi-Currency:

• Record leases in foreign currencies
• Automatic FX translation
• Hedge accounting (advanced)

Current Workaround#

Until full module launches, manage leases as follows:

Method 1: Manual ROU Assets#

1. Use lease calculator to determine ROU value
2. Create asset manually:
   • Asset Type: "Right-of-Use Asset"
   • Cost: Calculated ROU value
   • Useful Life: Lease term
   • Depreciation: Straight-line
3. Track lease liability externally (spreadsheet)
4. Record interest manually each month

Method 2: Spreadsheet Template#

Download our IFRS 16 Excel template:

1. Navigate to /try-lease-engine
2. Click Download Template
3. Fill in lease details in Excel
4. Use for external lease tracking
5. Import summary figures into AssetVault

Method 3: Partner Integration#

We partner with specialized lease accounting systems.

Recommended Partners:

• LeaseQuery
• Nakisa
• Visual Lease

Integration: Export AssetVault data, import lease data from partner system.

Lease Types Supported#

Operating Leases (pre-IFRS 16)#

Legacy classification - now all leases create ROU assets under IFRS 16.

Historical Note: Pre-2019 operating leases were expensed. Now capitalized.

Finance Leases#

Leases that transfer substantially all risks and rewards of ownership.

Indicators:

• Transfer of ownership at end
• Bargain purchase option
• Lease term ≥ 75% of useful life
• PV of payments ≥ 90% of fair value

Treatment: Same as owned asset under IFRS 16.

Real Estate Leases#

Office, warehouse, retail space leases.

Considerations:

• Often longer terms (5-10 years)
• May include service charges (exclude from liability)
• Renewal options common
• Dismantling costs may apply

Equipment Leases#

Vehicles, machinery, IT equipment.

Considerations:

• Shorter terms (2-5 years)
• Higher interest rates
• Residual value guarantees
• Maintenance included or excluded

Sale and Leaseback#

Sell asset then lease it back.

Accounting:

• Recognize gain/loss on sale
• Create ROU asset for leaseback
• Special rules apply - consult accountant

Glossary#

ROU Asset: Right-of-Use Asset - Your right to use leased property
Lease Liability: Obligation to pay future lease payments
IBR: Incremental Borrowing Rate - Discount rate for PV calculation
Lease Term: Period you have right to use asset (including probable extensions)
Lease Payment: Fixed or in-substance fixed payments
PV: Present Value - Today's value of future cash flows
Straight-line Depreciation: Even depreciation over lease term
Effective Interest Method: Interest calculated on outstanding liability balance

FAQ#

Q: When will the full lease module be available?
A: Planned for Q2 2025. Try our demo calculator now.

Q: Can I use the calculator for actual leases?
A: Yes, for calculation purposes. Results can be exported and manually recorded.

Q: Is the calculator IFRS 16 compliant?
A: Yes, it follows IFRS 16 principles. Always consult your accountant for complex leases.

Q: Can I save my lease calculations?
A: Not yet - save feature coming soon. For now, export to Excel.

Q: What if my lease has variable payments?
A: Calculator handles fixed payments only. Variable payments require manual tracking.

Q: Can I model lease modifications?
A: Not in the calculator. Re-run with modified terms and compare.

Q: Do I need to create ROU assets for all leases?
A: Under IFRS 16, yes (except short-term and low-value exemptions).

Resources#

• IFRS 16 Standard
• [Lease Calculator](Try Lease Engine)
• AssetVault Excel Template (download from calculator page)

Feedback Welcome#

We're building the lease module based on customer needs. Tell us what you need:

Contact: [[CONTACT EMAIL]]
Subject: Lease Module Feedback

Next Steps#

1. Try the Lease Calculator
2. Export sample schedules
3. Sign up for early access to full module
4. Review IFRS 16 resources

Coming Q2 2025: Full-featured lease accounting module with automated journals, lease modifications, and comprehensive reporting.