Crunchafi

Can Crunchafi be used for short-term leases?

Crunchafi Lease Accounting can be used to record short-term leases (12 months or less) for organizations that elect not to apply ASC 842 to such leases by creating a specific short-term lease GL expense account, entering zero discount rate and payment stream during lease setup, and tracking payments and expenses through journal entries and amortization schedules, although short-term lease expenses do not populate in footnote disclosures.

  1. 1.Crunchafi Lease Accounting
  2. 2.Lease Accounting FAQs
  3. 3.Leases

Can Crunchafi be used for short-term leases?

Short-term leases can be recorded; this article only applies to organizations that elect ASC 842-20-25-2

Organizations that have elected 842-20-25-2 have elected not to apply ASC 842 to leases of 12 months or less.

All leases added to Crunchafi Lease Accounting are billable, even if they are short-term (i.e., 12 months or less). See the Billing Details articles for more information.

To utilize Crunchafi Lease Accounting to track these short-term leases, create a short-term lease GL account expense account within your chart of accounts.

In Crunchafi Lease Accounting, go to Administration > GL Accounts and add it under the Variable Expense & Non-Lease Payments section. Make sure to select Other P&L Accounts as the GL Account Type.

When adding the lease, enter the following under Step 2 of the lease flow:

  • Enter 0% discount rate
  • Enter 0.00 payment stream
  • Enter Classification (required in order to enter a lease, and does not have an effect on short-term lease calculations)

For Step 3, enter GL accounts. These will not be used as there are no payments used for calculations.

For Step 4, select the GL account you created and then add the payment streams for your short-term lease.

Reporting for Short-Term Leases

  • Journal Entries: The payment and expense will be part of the entry.
  • Amortization Schedule: The cash outlay will show in Column T and the expense will show in Column W, Other P&L Accounts.
  • Footnote Disclosure: Short-term lease expense will not populate with this data. When using a separate GL account, this balance is what you will add to the Footnote Disclosure after exporting it from Crunchafi Lease Accounting.

NOTE

If you select to apply ASC 842 to your short-term leases, then they will be entered through the usual workflow.

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