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Knowledge Sharing | Calculate Monthly Lease Interest for Nonmonthly Asset Lease Payments

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edited Jul 23, 2020 11:23PM in Assets

Summary

Knowledge Sharing | Calculate Monthly Lease Interest for Nonmonthly Asset Lease Payments

Content

This feature is available in 20A

Summary

Calculate monthly accrued interest for leases with quarterly, semi-annual, or annual frequency. The application calculates the present value based on the lease payment frequency, and then allocates the calculated interest evenly to each month.

 

Detail Process

The Create Lease page includes a new option, Calculate monthly accrued interest. Normally, for a lease with a nonmonthly payment frequency, for example, a quarterly payment frequency, the application accounts for interest on lease liability at the end of each quarter as and when the payment occurs. As a result, there is no interest expense in other accounting periods. When you enable the Calculate monthly accrued interest option, the application accounts for interest on lease liability monthly instead of quarterly.

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