A lessor is defined under IFRS 16 as
An entity that provides the right to use an underlying asset for a period of time in exchange for consideration.
The steps to account for a lease as a lessor in Cradle are the following:
At either Companies or Agreements view select + New Agreement
Select your role as Lessor
Select the classification of the lease operating or financing
Onboard the lease
When a finance lease is on-boarded:
Cradle will calculate at initial recognition:
The lease receivable on balance sheet
Unguaranteed residual value on balance sheet
De-recognize the leased asset
Throughout of the lease Cradle will:
The payments received from the lessee
The interest earned on the lease receivable
The accretion of the value of the unguranteed value which will be take-up at lease end.
For a breakdown of the calculations refer to Overview tab.
When a operating lease is on-boarded:
Cradle will recognize the lease income on a straight-line basis, which is calculated over the total days of the lease (not monthly)
Cradle will automatically calculate if there is an outstanding amount either owed by the lessee (Lease Receivable) or owed by the lessor (Deferred Revenue - lessee has paid for the service but not yet provided by the lessor)
At completion of the lease there will be no receivable or unearned amount
For a breakdown of the calculations and the straight-line revenue amount refer to the Overview tab.
