You're almost there! Please answer a few more questions for access to the Applications content. Complete registration
Interested in joining? Complete your registration by providing Areas of Interest here. Register

Provision on leases

Received Response
22
Views
1
Comments
edited Jan 6, 2022 8:42AM in Lease Accounting 1 comment

Summary:

Is it possible to record a provision (e.g. onerous lease provision) against a lease ?

Content (required):

My organization has a requirement to record provisions against leases. Provisions are applied at the start of a lease, and increase/ decrease the RoU Asset by the value of the provisions. The expected results of the the provision are:

  1. journal entry to adjust the ROU asset: DR/CR Provision and CR/DR ROU Asset
  2. Amortization to be calculated based on the ROU Asset value (including provision)
  3. Utilization of the provision at the end of the lease term: DR P&L CR Provision

Howdy, Stranger!

Log In

To view full details, sign in.

Register

Don't have an account? Click here to get started!