NavigateERP for African business

Record a lease we hold (IFRS 16)

An office, shop, warehouse, vehicle or equipment you lease from someone else - as a right-of-use asset and a lease liability.

Steps

  1. Go to Lease & rentals → Leases we hold → New lease.
  2. Enter the lessor (a supplier), what is leased, the commencement, the term in months (including extensions you are reasonably certain to use), the payment and how often, whether it is paid in advance or in arrears, your incremental borrowing rate, initial direct costs and incentives received.
  3. For a lease of 12 months or less, or of a low-value asset, choose the exemption: its payments are simply expensed.
  4. Save the draft and check the schedule: the lease liability (present value of the payments), the right-of-use asset, and each period's interest and balance.
  5. Someone else clicks Approve commencement: Dr asset-acquisition clearing / Cr lease liabilities (2600), and a right-of-use asset is capitalised in Fixed assets over the lease term.

Good to know

  • Initial direct costs (paid on a supplier invoice to 1095) and incentives received settle the clearing account.
  • Depreciation of the right-of-use asset runs with your other assets in Fixed assets → Depreciation.