Present Value Calculator
The Occupier Present Value Calculator – Excel Template determines the future lease payments of your lease liabilities.
Present Value Calculator – Excel Template
Occupier’s Present Value Calculator Excel template helps users calculate the present value of future lease payments, a crucial step in determining lease liabilities under ASC 842 and IFRS 16. By inputting data like the discount rate and lease payments, users can easily calculate the total present value of their lease payments for accurate financial reporting.
Frequently Asked Questions:
Present value (also referred to as PV) of lease payments, is a financial calculation that measures the worth of a future sum of money. Lessees are required to calculate the present value of any future lease payments and record those financial obligations on the balance sheet for both finance and operating leases. The present value calculation defines the lease liability for a given lease.
The present value calculation has not changed from ASC 840 to ASC 842. Here is an overview of how the new standards define the present value of a lease:
Under both standards, lessees record, regardless of the lease classification, a right-of-use asset and lease liability at the lease commencement date. The initial right-of-use asset and lease liability is measured based on the present value of the lease payments (as defined in the standards) using the interest rate implicit in the lease (unless the rate cannot be readily determined, in which case the incremental borrowing rate of the lessee will be used).
Our Excel template is designed to be user-friendly. Simply input your lease details – that includes the annual discount rate, the periodic discount rate, and the periodic payments. Lastly, you’ll need to indicate if the payments are made at the beginning or the end of the month.