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Calculation Methodology
Lease102 supports multiple calculation methodologies to match your organisation's approach and auditor requirements.
Day Count Convention
How interest accrues between payment dates:
| Convention | Description | Best For |
|---|---|---|
| Act/365 (XNPV) | Actual days ÷ 365 | Default - Excel compatible |
| 30/360 | 30 days/month, 360 days/year | Banking |
| Act/Act | Actual days ÷ actual year | Precise |
Compounding Frequency
How often interest is calculated:
Match Payment Frequency
Compounding frequency should match your payment frequency for best results.
| Frequency | When to Use |
|---|---|
| Monthly | Default for monthly payments |
| Quarterly | For quarterly payment leases |
| Daily | For irregular payment intervals (e.g., Quarter Days) |
| Annual | Simpler, less common |
Lease-Level Overrides
You can set calculation methodology per-lease or inherit from organisation defaults:
Inheritance
Leave lease-level settings blank to inherit organisation defaults. Only override when justified (e.g., Quarter Day leases requiring daily compounding).
| Setting Location | Description |
|---|---|
| Organisation Settings | Default for all new leases in your organisation |
| Lease Advanced Settings | Override for a specific lease only |
Matching Settings to Lease Type
Recommended calculation settings by lease type:
| Lease Type | Day Count | Compounding | Rationale |
|---|---|---|---|
| Monthly property | Act/365 (XNPV) | Monthly | Standard UK practice |
| Quarterly standard | Act/365 (XNPV) | Quarterly | Match payment frequency |
| English Quarter Days | Act/365 (XNPV) | Daily | Irregular periods (87-97 days) |
| Scottish/Irish Quarter Days | Act/365 (XNPV) | Daily | Irregular periods |
| Vehicle/equipment | 30/360 or Act/365 | Monthly | Follow lessor terms |