Lease Accounting PDF
Lease Accounting PDF
IBM TRIRIGA Real Estate Management software helps you generate higher returns from real estate transactions, avoid
lease penalties and over-payments, and streamline lease accounting practices. It incorporates current lease accounting
standards so you can be up-to-date with industry best practices. Plus, it helps real estate executives make more-
informed real estate decisions to reduce occupancy and operating costs.
Use the Accounting tab of the lease form to specify the Financial Accounting Standards Board (FASB) and International
Accounting Standards Board (IASB) information. This information includes the accounting details, borrowing rate,
growth assumptions, rent component assumptions, and likely term option. This tab also calculates the lease treatment
or lease classification for FASB-IASB. The form shows this tab only if you have access as a Lease Accountant role with
a Real Estate Manager license.
Contents
• I. Notice to IBM TRIRIGA Clients
• We would like to take this opportunity to provide you with information related to the upcoming
implementation of the new lease accounting standards described in ASC 842 and IFRS 16. IBM TRIRIGA
includes features and functions to assist your company in adopting the new accounting standards. We
recommend that you work with your financial advisors to address how these standards apply to your
organization.
• Your company may have one or more agreements in place with companies or affiliates of IBM under which
you have purchased entitlements to IBM’s TRIRIGA offering. As you work with your advisors to interpret these
new standards, it is imperative that you stay connected to the IBM community to take advantage of offering
resources as soon as they become available. IBM will continue to monitor statements and guidance from
standard-setters like FASB and IASB and may issue updates to TRIRIGA or communications as a result.
• IBM strongly recommends that clients upgrade to the most recent release of TRIRIGA and continue to install
future releases to benefit from the full capabilities and utility of the software related to lease accounting
standard. In addition, clients should frequently monitor this TRIRIGA section of the wiki for offering
information, including fixes, software patches, release notes and other supporting documentation.
• CUSTOMERS SHOULD CONSULT WITH THEIR ACCOUNTING ADVISORS AND IMPLEMENTATION PARTNERS
TO DETERMINE WHAT IMPACT, IF ANY, MAY RESULT FROM THE CHANGES IN THIS RELEASE/FIX PACK/OM
PACKAGE. THIS RELEASE/FIX PACK/OM PACKAGE MAY CONTAIN CHANGES TO CERTAIN CALCULATION
MODELS WHICH MAY AFFECT PREVIOUSLY PUBLISHED FINANCIAL RECORDS AND HOW FUTURE RECORDS
ARE CALCULATED.
1. How does IBM TRIRIGA help clients to prepare for the implementation of new accounting standards ASC 842
and IFRS 16?
• IBM TRIRIGA includes features and functions that support accounting calculations and business scenarios
related to the new accounting standards, but IBM does not provide professional accounting advice. Each
client is responsible for pursuing professional accounting services to assist them in evaluating the specific
business requirements for their organization, ensuring they meet any applicable accounting requirements. For
clients to receive the most up to date features, it is critical that they upgrade to the current release and
promptly implement fixes as soon as they become available.
• Certain individual fixes may be delivered for clients whose project timelines prevent them from performing an
application upgrade. These fixes will be limited to certain versions and will be supported with manual
instructions for use by the client technical teams or their implementation partners. Manual fixes may require
effort beyond provided manual instructions to accommodate client configurations or customizations.
• For clients using IBM TRIRIGA on Cloud, the Cloud Service utilizes a continuous delivery model, with
different terms for platform and technology updates and for application updates. Platform and technology
updates are performed by IBM periodically and at IBM's sole discretion for all Cloud Service clients.
Application updates will not be applied for Cloud Service clients who do not specifically select the IBM
Facilities and Real Estate Management on Cloud (TRIRIGA) Setup for As-Shipped Applications, or for Cloud
Service clients who select the IBM Facilities and Real Estate Management on Cloud (TRIRIGA) On Demand
Setup for Fully Configurable Applications. When applied, application updates will override a client's
application configurations.
• Clients should work with their implementation partner to determine upgrade plans.
4. If a client decides not to upgrade to a future version but needs current functionality/fixes, what is the IBM
process for back migration of fixes/enhancements to prior versions?
• IBM will address issues on releases in accordance with the client’s support contract. For example, the 10.6
release stream is generally supported from 2018 until 2023. If issues are found on this release and the client
cannot upgrade, fixes will be provided, likely in the form of documentation. IBM reserves the right to deliver
larger scale fixes via a fix pack on a later release.
• If the client cannot locate a fix for their specific issue, they should report the issue using the standard
support process.
• IBM typically makes the TRIRIGA Roadmap available during the semi-annual TRIRIGA User Group meeting.
Updates are normally release every six to twelve months and include both TRIRIGA platform and application
updates.
• IBM will continue to monitor statements and guidance from FASB and IAS and may issue future TRIRIGA
updates or other communications as a result. IBM is finding variability in the way that clients interpret the
standards for their own business needs, so clients should continue to work with their professional accounting
service providers and implementation partners for interpretation of the standards and related customization
of TRIRIGA.
9. What is the IBM plan for continued support beyond a client’s "Go-Live" date?
• Refer to the client’s software support contract or service description for support terms and conditions.
• TRIRIGA functionality has been updated in response to the core aspects of ASC 842 and IFRS 16 (and ASC
840 and IAS 17), with the understanding that clients may need to configure or customize the solution to
accommodate its own specific accounting, lease type, or business operational needs, such as customized
lease types or payment arrangements. TRIRIGA is designed to be configurable by clients to optimize their
system.
11. How can project-specific functionality be introduced into the standard TRIRIGA version?
• IBM maintains an active list of client requests. Clients can influence the prioritization through the Request for
Enhancement (RFE) process, in which a client submits a request for new functionality and other clients can
vote on such requests. The offering management and development teams review the RFEs regularly for
consideration in the next feature pack or release. For enhancements that are relatively large in scope, clients
can work with the offering management and development teams to collaborate on the design and
specifications used by development.
12. How does the IBM support model work to cover client project-specific modifications until such time as the
customization may become standard?
• TRIRIGA support is provided for the standard TRIRIGA product pursuant to the client’s software support
contract. Support of project-specific modifications is provided separately as an additional service delivered by
IBM Services or implementation partners.
• Non-Standard Calendar support was added with the 10.6.0.4 fix pack, which is available from Fix Central.
14. How does TRIRIGA update the incremental borrowing rate (IBR) across a population of leases?
• Borrowing rates can be loaded into TRIRIGA during implementation along with other data elements. After
activation, borrowing rates must be updated manually, on a lease by lease basis. Clients should consult with
their professional accounting service provider when establishing and setting incremental borrowing rate prior
to standard adoption.
• TRIRIGA calculates lease liability discounting the rent payments due over the likely term of the lease, using
the rate implicit in the lease. If the rate implicit in the lease is not provided in the TRIRIGA record, the
calculation will be made using the incremental borrowing rate provided in the TRIRIGA record. For the
calculation, all rent payments are deemed to be made on the first day of the month, which may result in a
difference between the calculated lease liability and any expected result using a daily discounting model.
Some clients have requested lease liability calculation based on a daily discounting model. As NPV is
currently being calculated consistently, any available changes to this model will be considered as an
enhancement.
• TRIRIGA ships with over 400 Journal Entry templates designed to be configured for integration with a client’s
specific financial reporting system and process.
• Clients input and maintain exchange rates in TRIRIGA exchange rate tables. Each rate can be given an
effective "from" and "to" date. During system setup, clients can determine from which exchange rate table,
including a table of the blended rate, that each of the reports will pull.
• The weighted average discount rate and remaining average lease term are calculated in accordance with the
following ASC 842 disclosures:
• Template disclosure reports are provided and may be customized to assist clients with their quantitative
disclosure requirements under ASC 842 and IFRS 16. Consult with your accounting advisors to assess your
organization’s compliance with specific reporting requirements.
20. Does TRIRIGA provide reports showing all Assets and Liabilities?
21. How does TRIRIGA handle late fees and excess payments?
• Late fees: The Late Fees field allows for you to manually enter an amount of late fees, but it does not have
any additional functionality built around it.
• Excess payments: The amount which is paid higher than the payment line items (PLIs) due is not considered
in the as-shipped Aging Report or the Lease Invoice. But you can select the due date at a later point in time
to get the payment line items (PLIs) due, which is equal to the amount you are paying even when paying in
excess. It will be reflected in the as-shipped Aging Report and the PLIs will be marked as paid.
• A sample scenario that explains the field functions when using Process AR Receipts, is available for download:
IBM TRIRIGA Process AR Receipts Scenario (PDF)
23. How do you transition leases from another system into TRIRIGA?
• A guide that explains how to transition a lease from another system into TRIRIGA, is available for download:
IBM TRIRIGA Guide for Transitioning Leases to TRIRIGA (PDF)
• IBM TRIRIGA 10.7.0 includes new and enhanced TRIRIGA Lease Accounting features, such as asset class
enhancements and IFRS reversal impairment. For complete details on these changes, see the IBM TRIRIGA
Release Notes for 10.7.0 and 3.7.0.
• For specific Lease Accounting details on the updates, download the combined IBM TRIRIGA Release Notes
for 10.5.3-10.7.0 (Lease Accounting).
Version 10.6.1
• IBM TRIRIGA 10.6.1 includes new and enhanced TRIRIGA Lease Accounting features, many of which were
introduced in the TRIRIGA 10.6.0.1, 10.6.0.3, and 10.6.0.4 fix packs. For complete details on these changes, see
the IBM TRIRIGA Release Notes for 10.6.1 and 3.6.1. Further documentation and updates to existing
documentation will be released in upcoming months.
• The new IBM TRIRIGA Guide for Transitioning Leases to TRIRIGA (PDF) is available for download.
Version 10.6.0.4
• IBM TRIRIGA 10.6.0.4 includes APARs as well as enhancements for lease accounting, including support for
non-standard calendars. The fix pack is available for download from Fix Central. For specific details on the
updates, download the combined IBM TRIRIGA Release Notes for 10.5.3.1-10.6.0.4 (Lease Accounting).
Version 10.6.0.3
• IBM TRIRIGA 10.6.0.3 includes APARs as well as improvements in performance for lease accounting. The fix
pack also includes updates to the BIRT disclosure reports, which had previously been offered as a separate
OM package. The fix pack is available for download from Fix Central. For specific details on the updates,
download the combined IBM TRIRIGA Release Notes for 10.5.3.1-10.6.0.3 (Lease Accounting).
Version 10.6.0.1
• IBM TRIRIGA 10.6.0.1 includes 125 fixes, including many APARs, and is available for download from Fix
Central. For specific details on the updates, download the combined IBM TRIRIGA Release Notes for
10.5.3.1-10.6.0.1 (Lease Accounting).
Version 10.6.0
• IBM TRIRIGA 10.6.0 includes new and enhanced TRIRIGA Lease Accounting features that were introduced in
the TRIRIGA 10.5.3.1 and 10.5.3.2 fix packs, which included improvements to areas like the adoption process,
index adjustments, incentive schedules for tenant improvements, journal entry support, dismantle cost,
disclosure reports, local reporting, and ASC 842 GAAP classification changes from Operating to Finance. For
complete details on these changes, see the IBM TRIRIGA Release Notes for 10.5.3.1 and 10.5.3.2. In
addition, TRIRIGA 10.6.0 includes enhancements to incentive schedules that are created after a modification
and the ability to include exit or disposal liability carryover.
• For specific details on the updates, download the combined IBM TRIRIGA Release Notes for 10.5.3.1-10.6.0
(Lease Accounting).
• You can download templates to add BIRT Disclosure Reports to IBM TRIRIGA Lease Accounting. A separate
OM package is available if you require local reporting. If you are not using local reporting, you do not need
the second OM package. For more information on local reporting, see the Local Reporting (10.6.0) topic in
the IBM Knowledge Center. The OM packages contain queries and BIRT report templates. After the OM
import, existing queries are updated and the BIRT reports are created or updated in the Document Manager.
• The BIRT disclosure report templates run in IBM TRIRIGA version 10.5.3.1 and later.
• The OM packages containing the templates for the BIRT disclosure reports are available for download.
o 2. In the Administrator Console, verify that the Object Migration Agent and the Object Publish Agent
are running.
o 7. Use the Validate action to verify that the objects can be imported successfully.
o 8. Use the Import action to initiate the import process. A notification is sent to the user when the import
process is completed.
Version 10.5.3.1
• IBM TRIRIGA 10.5.3.1 provides advanced lease accounting enhancements and changes, including additional
support in the areas of index adjustments, incentive schedules for tenant improvements, lease history
performance, journal entries, dismantle cost, local reporting, and ASC 842 GAAP classification changes from
Operating to Finance.
• For specific details on the updates and additional resources, the IBM TRIRIGA 10.5.3.1 Documentation and
Resources (ZIP) is available for download.
• Updates to the BIRT disclosure report templates, in an OM package (ZIP), are also available for download.
• IBM TRIRIGA 10.5.3 provides advanced lease accounting enhancements to IBM TRIRIGA Real Estate
Manager. The feature set transforms the IBM TRIRIGA Real Estate Manager module into a sub-ledger system
for real estate and asset lease accounting. This new set of functionality delivers the capability to generate
journal entries for ASC 840 and ASC 842 under US-GAAP, as well as for IAS 17 and IFRS 16. It also covers
period closings and report generation for the most common reports required under the ASC 842 accounting
standard. Segregation of duties between the lease administrator and the lease accountant are also added to
make a clear delineation of the roles.
• In addition to the updates in the IBM Knowledge Center, the IBM TRIRIGA 10.5.3 Lease Accounting
Implementation Guide (PDF) is available for download.
• Additional BIRT disclosure report templates, in an OM package (ZIP), are also available for download.
Version 10.5.2
• IBM TRIRIGA 10.5.2 continues to enhance IBM TRIRIGA Real Estate Manager lease accounting processes to
accelerate compliance with the final lease accounting standards announced by FASB in February 2016 and
IASB in January 2016.
• In addition to improvements to functionality for Monthly partial payments and enabling the Generate
Payment Schedules wizard on clauses, specific improvements for the current accounting standard (ASC 840)
and the new accounting standard (ASC 842) include:
▪ Support for Fair Market less than Net Present value scenario
▪ Full support of Monthly and Non-Monthly for Straight-Line/Amortization schedules for Standard
Calendar
▪ Impact of Initial Direct Cost and Rental Prepayment to Operating/Finance accounting schedule
▪ Full support of Monthly and Non-Monthly in Operating/Finance schedules for Standard Calendar
• In addition to the 10.5.1 documentation, the IBM TRIRIGA 10.5.2 Lease Accounting Implementation Guide
(PDF) is available for download.
• IBM TRIRIGA 10.5.1 allows you to adopt the new lease accounting requirements for FASB and IASB in time
to be audit-ready with two years of historical data by 2019. The following documentation relevant to this
release is available for download.
o IBM TRIRIGA Lease Accounting for the New FASB and IASB Standards (PDF)
• You can also view the Best Practices for Lease Accounting.
Version 10.5.0
• IBM TRIRIGA 10.5.0 adds support for the following calculation types:
Version 10.4.2
• IBM TRIRIGA 10.4.2 lease accounting utilizes a new approach of Monthly Rate/Daily Rate which is calculated
on each of the payment schedule within the Accounting Start/End Date. Based on application settings,
Monthly Rate or Daily Rate is used to populate the Net Rent payment for a Straight Line Schedule (Operating
Leases)/Capital/Finance schedules (Capital or Finance Leases).
• The 10.4.2 release also supports the partial-period calculations for Straight-Line/Capital/Finance Schedule. The
Straight-Line calculation that was introduced in 10.3.2 is still supported.
• For information about avoiding errors with straight-line calculations and other FAQs, the IBM TRIRIGA 10.4.2
Real Estate Manager Best Practices (PDF) is available for download.
Version 10.3.2
• Prior to IBM TRIRIGA 10.3.2, the straight-line calculations for both real estate and asset leases were based
on payment line items (PLIs) in the Payments section of the Payments tab. To better align with current FASB
standards and to cover the latest developments from the May 2013 FASB/IASB exposure draft on lease
accounting, the new IBM TRIRIGA 10.3.2 straight-line calculations are based on fiscal line items (FLIs) in the
Schedule Straight Line section of the Accounting tab of the lease form (for both real estate and asset
leases).
• For information about the changes that were made in straight-line calculations, the IBM TRIRIGA 10.3.2
Lease Accounting, Straight-Line Schedule Upgrade (PDF) is available for download.