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Formula to Calculate Opening Liability and IFRS 16 Right of Use Amortization in Fusion Lease Accounting (Doc ID 2752386.1)

Last updated on FEBRUARY 15, 2021

Applies to:

Oracle Fusion Assets Cloud Service - Version 11.13.20.10.0 and later
Information in this document applies to any platform.

Goal

Users need details about the formula to calculate Opening Liability and IFRS 16 Right of Use Amortization in Lease Accounting.
They are trying to replicate existing customer Leases contracts, but are getting differences in the amounts.

An example below:
Lease term 12 years (starting Jan 1st 2019) with Discount Rate 5.682 and Proration Method Days/Month and below payments:

Date Payment
1/1/2019 6,500,000.00
1/1/2020 6,500,000.00
1/1/2021 7,500,000.00
1/1/2022 7,500,000.00
1/1/2023 7,500,000.00
1/1/2024 8,000,000.00
1/1/2025 8,000,000.00
1/1/2026 8,000,000.00
1/1/2027 9,500,000.00
1/1/2028 9,500,000.00
1/1/2029 9,500,000.00
1/1/2030 10,500,000

Fusion is calculating Opening Liability as 72,019,452.24 but customer calculation is 71,423,217.60.

Customer is using below formula: Payment value * Discount factor. Where Discount factor is calculate as - Interest rate * Number of days from lease start date/365.
 

Solution

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In this Document
Goal
Solution
 



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