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    Lease Termination
    • 19 May 2022
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    Lease Termination

    • Updated on 19 May 2022
    • 1 Minute to read
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    Article Summary

    Use Case: Circumstances may require an early termination to the lease. In these instances, a termination is required to remove the accumulated amortization.

    Step By Step Process:

    • Navigate to the lease record to be terminated. Click on the Lease Action drop down menu and choose Terminate Lease.
    • Update the fields as necessary for the Lease Termination.

    Field

    Description

    Example

    Effective Termination Date

    Choose the date on which the lease will be terminated.

    Feb 1, 2026

    Cash Paid to Terminate Lease

    Input the amount to be paid in the lease termination month. Note that this amount should include both (1) standard lease payments, as well as (2) termination penalties or other consideration to be paid upon termination
    Note: This amount will be recorded to the Lease Liability Payable Clearing Account

    3,500

    Cash Received to Terminate Lease

     

    Input the amount to be received from the termination.
    Note: This amount will be recorded to the ROU Clearing Account

    0

    Termination Reason

    Provide a brief description of the reason for the termination. 

    Early termination

    Termination Note

    Provide any additional description or details for the termination.

    Excess supply and under-utilized; to return to lessor

    • After double-checking updates and inputs for the Lease Termination, click Terminate Lease
    • Once the termination is complete, you can see on the amortization schedule that all line after the termination date have been removed.
    • You can review the termination information under the Terminations tab at the bottom of the lease record.
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