Amortization End Date Is Not Equal To Lease End Date When An Option Is Added To A Lease (Doc ID 3048279.1)

Last updated on SEPTEMBER 25, 2024

Applies to:

Goal

Amortization End Date is not equal to Lease End Date when an option is added in a lease

Created an expense lease having dates as follows:

Start Date as : 5/6/2024
End Date as : 5/5/2039

So lease duration is 15 years.

Added two options.
1st Option : For Lease Renewal for 5 years from 5/6/2039 to 5/5/2044
2nd Option : For Lease Renewal for another 5 years from 5/6/2044 to 5/5/2049

The Lease End Date shown is : 5/5/2039, but Amortization End Date shown is : 5/5/2049.

Since above two options are not yet exercised, the Amortization End Date was expected to be the (current) Lease End Date which is 5/5/2039, instead of 5/5/2049. Because of this the Interest/Liability calculations are undesired, since the Amortization End Date being considered is 5/5/2049, instead of 5/5/2039.
 

Solution

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