Guam Third Party Master Lease Agreement
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FAQ
Commencement Date of the Lease (Commencement Date): The date on which a lessor makes an underlying asset available for use by a lessee.
In simpler terms, the lease commencement date is the date when the tenant begins occupying the premises and the lease term starts, whereas the inception date is the date when the lease agreement itself is formed.
Definition from ASC 842 Glossary Commencement Date of the Lease (Commencement Date): The date on which a lessor makes an underlying asset available for use by a lessee. See paragraphs 842-10-55-19 through 55-21 for implementation guidance on the commencement date.
The inception date of a lease is either the date of the creation of the lease agreement or the date of the commitment by both parties for principal provisions of a lease. The inception date is whichever of these two dates is earlier.
To classify a lease, a lessee should use all lease payments (i.e., including payments made at or before the commencement date), whereas only the remaining payments due should be used to measure the lease liability at lease commencement.
While the start date, move-in date, rent commencement date or commencement date may signify the date when various aspects of the agreement come into effect, the Lease Commencement Date is the date when possession or control of the leased asset is transferred from the lessor to the lessee.
The inception of the lease means the date on which there is a written contract between the lessor and the lessee, any lease conditions have been met and no terms remain to be agreed.
The inception date is whichever of these two dates is earlier. The commencement date of a lease is the date that marks the beginning of the period of time during which a lessee is entitled to exercise the right to use a leased asset. This is the date on which lease accounting begins.
