leases
deep-dive
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There are a number of features within the nettTracker leases module. This guide is intended to help you understand some of the more subtle tools available.
Creating & managing leases
Creating new items
New leases: Create manually
During ‘create’: Name the lease and and a description/reference if desired. Choose accounting treatment of ‘Finance Lease’ or ‘Operating Lease’. Depending on the accounting standards followed, operating leases can be treated as finance leases. In nettTracker a finance lease will amortise the right of use asset ‘straight line’ over the lease term. Using the ‘Operating Lease’ option, the monthly amortisation values will increase as the value of the asset and loan decreases.
Market value: Leases can be created using the ‘Market value’ of assets at the start and expected value at end of lease. This together with other details will calculated the implicit rate of interest. Where market values are not known, an effective interest rate can be used.
Lease details: In this section, total value of costs incurred and incentives are entered together with deposit, the regular lease payment amount, total number and frequency of payments, and whether payments are made in advance or arrears. All of these details contribute to calculate the lease liability and right-of-use asset value.
Dates: The lease date, first payment date will affect how the schedule is created. The nettTracker processing start affects the date from which journals will start to be posted. Leases from prior years can be set up and all of the prior period adjustments will be marked as ‘closed’.
Asset membership: Selecting the asset group in this area will ensure the Right Of Use asset is created and saved to the correct group on the asset register.
Posting accounts: The appropriate P&L and Balance Sheet account categories are selected to ensure the monthly journals are correctly posted for the interest payable on the lease. Depreciation on the right of use asset will be posted in accordance with the lease type and asset group settings.
Location and tracking options: If in use, select class/location(QuickBooks Online), Tracking Categories (Xero), Cost Centre/Department (Sage).
Existing items
General editing: Only permitted to change the name/description of these item types.
Delete: If an item should not be listed, simply delete. The option to create a journal to reverse any interest posted will be selected and will be updated fully once the last period end is re-processed.
Other important features
Visual reports and guides
Dashboard summary to assist with reconciliations: Values on the nettTracker dashboard display the total values of all loans and should always balance back to values per the balance sheet.
Statement: View details of all items per each group for the period selected. The includes all movements and amounts due within and after 1 year.
Projection: View the adjustments to be made each month for the period selected. (payments and interest)
Deleted items: View a list of items that have been deleted.
Reports
Statement: Download details of items. A single Excel file is downloaded with a different tab for each loan/lease ‘Type’.
Projections: Download a forecast of expected adjustments/repayments for any desired period.
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