Step 4: Add initial assessment

Click Add initial assessment in the Lease section of the contract.

This will calculate the lease assessment with liability and right of use for the complete lease period. A short summary is displayed on the contract card.

Tip!
When creating lease contracts without initial assessment, you will get a notification message reminding you of this. You can nonetheless close the contract and add initial assessment at a later point of time. If you do so, we recommend using the filter list for contracts where you can easily find all contracts without initial assessment (use the filter "Lease: No initial assessment"). See also How to find IFRS 16 contracts.

Click View detailed calculations to view details and check that the beginning balance is equal on both sides (Lease liability versus Right of use) and that the payment amount and payment frequency are as you expect it. Check also that the depreciation continues correctly until the end of the contract so that you have an ending balance of zero at the expected date.

You can also download a calculation example to Excel containing the formulas used for the creation of IFRS 16 reports.

After initial assessment the registration job is done.

But there can be, of course, situations requiring a new initial assessment or a later modification / reassessment. It might also happen that you consider purchasing the lease object and thus want to register a purchase option, or that need to terminate the contract before the registered stop date.

How you proceed in these situations is described under Scenarios.