Lease Accounting

⚠️ **Finance warning / Avertissement finance** : informational only, not investment advice. Lease accounting drives real balance sheet numbers: a wrong term, a wrong discount rate or a missed embedded lease misstates debt and assets, there is a real risk of loss in any reporting or covenant decision taken from wrong figures, and no output here is a promise of return. Curated by Skill Harbor: the lease accounting skill of GAJETOso/financeskills. Use it to identify, measure and account for leases under IFRS 16 or ASC 842, including the embedded leases hiding in service, outsourcing, transport or storage contracts. Identification comes first: is there an identified asset with no substantive substitution right, and does the customer control its use and obtain substantially all its economic benefits. Measurement follows: the term (non-cancellable period plus reasonably certain extension or termination options), the payments in and out of scope (fixed and in-substance fixed and index-linked variable payments in, usage-based variable payments out, residual guarantees, purchase options), and the discount rate, the rate implicit in the lease or else the incremental borrowing rate. At commencement the liability is the present value of unpaid payments and the right-of-use asset adds prepaid payments, initial direct costs and the restoration estimate, minus incentives received; afterwards the liability runs on the effective interest method and the asset depreciates straight-line over the shorter of term and useful life. The skill handles the short-term and low-value exemptions, index or rate remeasurements, option reassessments and modifications (a modification adding an asset at a market rate is a separate lease, a scope decrease reduces the asset proportionately with gain or loss to profit or loss), and delivers a lease accounting memo with the conclusion, the inputs table, the full amortization schedule with a parallel depreciation track, the annual journal entry summary and the judgments. From the GAJETOso/financeskills repository (MIT). Honest caveats: lease figures feed official financial statements, so have the memo and the schedule checked by a qualified professional before any official use; the contracts, payment schedules and rate inputs are yours to supply and to verify, and the shipped calculate.py script should do the math instead of mental arithmetic. Skill Harbor never reviews the code, review it yourself before use.