Create Footnote Lease For Free

The new lease standard increases the scope and complexity of the financial statement footnote disclosure with additional requirements for both quantitative and qualitative disclosures. While providing useful information, using a spreadsheet to create these disclosures becomes far more difficult than before.

Footnotes are one form of disclosure included in a financial report. Virtually all financial statements need footnotes to provide additional information for several of the account balances.

Footnote disclosures describe how the numbers in the statement of financial position, statement of activities and cash flow statements were determined and provide a sense of where the organization is going. Financial statements are required to provide full disclosure, including future contingencies and commitments.

Footnotes are required to disclose the nature and justification for a change in accounting principle, including any impact of that change on the financial statements.

The formula is quite simple ? you just multiply the annual lease payment by the present value factor, and that results in the net present value of future minimum lease payments, which is recorded on the balance sheet as the lease liability (and ROU asset).

Finance lease and operating lease liabilities should be presented separately from each other and from other liabilities on the balance sheet or disclosed in the notes to the financial statements along with the balance sheet line items in which those liabilities are included.

Background: Note disclosures represent a fundamental component of the information that financial statement users rely on to make decisions related to a government's financial health, as well as to assess whether governments have been fiscally and operationally accountable.