Lease liability calculation using Daily Interest compounding
Summary:
We are implementing lease accounting application for a new customer. As per this application, the lease liability is calculated using daily interest compounding and we do not seem to have any option to change the same as well. In the current legacy application, client is using monthly interest compounding to calculate the lease liability.
At the time of migration of open leases, we only provide the ROU. Lease liability is calculated automatically by the system. Due to this, there will be differences between the lease liability balance that will be loaded as a part of GL Balances and the lease liability that is computed as a part of lease accounting application.