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- Help Center
- Lease Accounting
- Lease Modifications
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Getting Started
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Lease Administration
- Equipment Leases
- Change History Log
- Clauses
- Document Storage
- Financials
- Creating & Editing a Lease
- Critical Dates
- Lease Column Configurations
- Custom Fields
- Contacts
- Filtering
- Assets
- Lease Data Exports
- Occupier Analytics Dashboard
- Customizing Data Categories
- Lease Admin Overview
- Column Configuration & Filtering
- Tasks & Commenting
- Lease Payables
- Lease Data Imports
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Lease Accounting
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Transaction Management
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Broker Deals CRM
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Monthly Release Notes
What are lease modifications?
A lease modification is a change to the terms and conditions of a contract that results in a change in the scope of or the consideration for a lease (for example, a change to the terms and conditions of the contract that adds or terminates the right to use one or more underlying assets or extends or shortens the contractual lease term).
An entity shall account for a modification to a contract as a separate contract (that is, separate from the original contract) when both of the following conditions are present:
- The modification grants the lessee an additional right of use not included in the original lease
- A modification to increase the lease term is not considered an additional right of use
- The lease payments increase commensurate with the standalone price for the additional right of use
Remeasurement of the lease liabilities can vary by type of lease modification. Accounting for modifications can be time consuming and challenging based on the frequency of modifications and the complexity with accounting for them.
Occupier helps by calculating the modification entries and establishing a new amortization schedule based on the updated lease information.
To learn how to handle a lease modification in Occupier, click here.