Understanding Calculations
How lease liability, finance lease asset, and amortization work
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 102.20.50.
ROU Asset
The right-of-use asset equals lease liability plus initial direct costs and restoration costs, less incentives received. Learn FRS 102 Day 1 and subsequent measurement.
Discount Rates
FRS 102 requires discounting lease payments at the implicit rate, incremental borrowing rate (IBR), or OBR. Learn which rate applies and how Lease102 uses live SONIA data.
Amortization Schedule
The FRS 102 amortization 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.
Worked FRS 102 Lease Example
Complete worked example of FRS 102 lease accounting: discount rate, lease liability, ROU asset, Day 1 journal entry, and 12-month amortization schedule for a 5-year UK office lease.