August 9, 2022
What is lease amortization? A lease amortization is the process of repaying a leased asset over the course of time or terms of an actual leased property. ASC 842 requires commercial real estate professionals to have a working knowledge of how to read and understand amortization schedules.
This is where CRE professionals will find more information about all things that are associated with lease amortizations and schedules. As it pertains to lease amortization, there are obvious similarities to a loan amortization but in this case interest is not a factor and the agreed upon costs or payments apply to leased assets that are owned by a separate party, such as a commercial real estate or commercial leasing organization.
From an accounting perspective, this simply involves spreading out the cost of a lease into a number of monthly payments depending, of course, on the terms and length of that lease. This is an important process when it comes to determining the budget surrounding that lease, expected monthly revenue and how and when to expense for any maintenance and/or upkeep on the leased property in question.
Our lease amortization software is designed to simplify the process and allow for real time tracking for all the essential details that are needed by those who create and schedule lease amortization. When it comes to organizing a budget for and around leased properties, we make it easy for those in the know and who need to know.