Publish Your First Measurement
After your lease is published, you establish its book under each accounting standard it is reported under, record the accounting judgments, and measure the book. The measurement produces the lease liability, the right-of-use (ROU) asset, and the schedules: the liability schedule, the ROU asset schedule, and the amortization schedule.
This is the first measurement for a lease, not a change to an existing one. For the concepts behind each step, see How lease accounting works.
A lease cannot be measured until it is published. The published version is what the accounting measures, so a draft never affects schedules or journal entries.
Before you start
The lease is published. If you just uploaded it, finish reviewing and publishing it first; see Upload your first leases.
You know which accounting standard or standards the lease is reported under. Leasecake supports ASC 842, IFRS 16, and FRS 102, and a lease reported under more than one standard carries a book for each.
Measuring requires edit access to the book.
Open the lease's Accounting page
The lease's accounting lives on its Accounting page. Open the published lease, then open its Accounting page. Everything that follows, from the book to the schedules, is reviewed there.
Establish the book
Each lease gets a book for each standard it is reported under, so the first step is choosing which standard this book reports under.
On the lease's Accounting page, establish a book.
Choose the accounting standard the lease is reported under.
Accounting is reported for a reporting entity, which carries its own setup: a functional currency, a fiscal calendar (which may have 13 periods), and Policy Election Sets, the accounting policy choices for each standard. The same lease can measure differently under two reporting entities with different policy elections.
If your lease is in more than one currency, each currency is measured and scheduled separately, and exchange rates are maintained in the app.
Record the accounting judgments
Establishing the book means recording the accounting judgments for the lease under that standard. These judgments drive everything the book produces, so they are recorded up front:
Classification: operating versus finance, including the short-term and low-value exemptions.
Discount rate: the rate used to measure the lease, entered separately for each currency the lease measures in.
Lease and non-lease components: how the lease separates components of the payment.
Initial direct costs: costs included in the measurement.
Set the discount rate for each currency
The discount rate is captured separately for each currency the book measures in. For each currency, use the policy-resolved rate or enter a custom rate. A policy-derived rate is labeled by where it comes from, such as Incremental Borrowing Rate, Risk-Free Rate, or Policy Rate. If any currency uses a custom rate, you enter one rationale that covers all of them.
When no policy rate resolves for a currency, its rate shows as "—" labeled Rate Unavailable. If classification is being reassessed, the measurement cannot advance until you enter a custom rate for that currency or a discount-rate curve is configured.
If the lease carries a cutover from a prior system, the prior-system rate is locked only for the cutover currency. If you turn the cutover off, you can keep the custom rates you entered for the other currencies.
Measure the book
Measuring turns the judgments you recorded into the lease's accounting outputs.
If your lease is in more than one currency, each transactional currency other than the functional currency needs an exchange rate chosen in the standard's Policy Election Set before you measure. Set the choices in Setup → Policy Election Sets, in the Exchange Rates section.
Measure the book.
Review the results on the lease's Accounting page: the lease liability, the ROU asset, and the three schedules (the liability schedule, the ROU asset schedule, and the amortization schedule).
Where this fits in your first month
When a measured lease later changes in a way that affects accounting, the change becomes a revision instead of a new measurement: see How lease accounting works for how revisions are triaged, remeasured, and settled.
If you are moving balances over from another system, a cutover reconciliation carries over your prior accounting as the starting point for measurement.
Your measured schedules are what the month-end close turns into journal entries. Next, close your books: see Closing your books.