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Hello Dmitrii,
The accrual/deferral of prepayments / irregular payments are now handled through the lease valuation process so the contract accrual/deferral functionality is no longer required. By including the accrual/deferral functionality built into the valuation process, the maintenance of the contract is simplified and fewer period end closing transactions are required. To demonstrate how this functionality works, please refer to the following example.
Take a lease that has a quarterly payment for service charges that is paid in advance as well as a monthly lease payment per the following cashflow:
In this example, we would expect the payment for storage area to be capitalized (IFRS16) and the service charge to be expensed on a straight-line basis. An IFRS16 valuation rule is created for the contract and the following properties are assigned to each condition within this rule:
The service charge condition has a Condition Valuation Property of “Linearization”. This means the payment is straight-lined over the period. The following valuation postings will be generated in the first period (January):
Notice the service charge expense is debited for $1,000 and the clearing account (Asset because it is a prepayment) is credited for $1,000. When the lease payment is posted for period 1, the following entries are generated:
The Asset account is debited $3,000 and the supplier is credited $3,000. The net after the valuation posting is a balance on the asset account (1659000) is $2,000. $1,000 has been expensed and the supplier has been paid $3,000.
Please let me know if you have any further questions.
Best regards,
Tom Anderson
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