Understanding Calculations
How FRS 102 lease liability, ROU asset, discount rate, and amortisation schedules are calculated. Worked examples with OBR, IBR, and SONIA rates.
Lease Liability (Present Value)
FRS 102 lease liability is the present value of future lease payments discounted at the OBR, IBR, or implicit rate. Learn Day 1 measurement per FRS 102.20.49.
Monthly Charges for Quarterly Leases
Charge a quarterly, half-yearly or annual lease in every month of its term. Spreads each period across the months it covers without re-pricing the lease.
Rent Payment Date & First-Period Apportionment
Model leases that start mid-month but pay rent on a fixed day: pro-rated first instalment on a calendar-month or 365ths basis, and settlement on commencement.
ROU Asset
The ROU asset equals lease liability plus initial direct costs and restoration costs, less incentives. FRS 102 Day 1 and subsequent measurement.
FRS 102 Discount Rate: OBR, IBR, Implicit
Which FRS 102 discount rate to use: obtainable borrowing rate (OBR) for SMEs, IBR, or rate implicit in the lease. Worked examples plus live SONIA.
Amortisation Schedule
The FRS 102 amortisation schedule shows period-by-period interest expense, principal reduction, ROU asset depreciation, and closing lease liability balance.
Calculation Methodology
Learn how Lease102 implements FRS 102 Section 20: day count conventions, payment timing (advance or arrears), compounding frequency, and period-rate derivation.
FRS 102 Lease Example: 5-Year Office Lease
Step-by-step FRS 102 Section 20 worked example: discount rate, lease liability, ROU asset, Day 1 journal, 12-month schedule, and a transition-dated example.