What happens if I need to change the discount rate on a lease?
Crunchafi Lease Accounting advises against directly changing the discount rate after journal entries are recorded because it causes misalignment between amortization schedules and financial statements, recommending instead to use the revision workflow to apply discount rate changes from the revision date onward while preserving historical balances.
What if I need to change the discount rate on a lease?
We recommend only using the revision workflow to make discount rate changes in Crunchafi Lease Accounting
IMPORTANT
Changing the discount rate after Journal Entries have been recorded is not recommended.
Avoid editing the discount rate directly once Journal Entries have been recorded as this retroactively updates the lease from commencement and causes misalignment between the Amortization Schedule and Financial Statements.
If the discount rate is changed after the lease began, prior journal entries will need to be trued up to match the new Amortization Schedule.
Only use the revision workflow to apply discount rate changes. This preserves historical balances and applies updates going forward from the Revision Date.
For more information on when to choose a revision vs. an edit in Crunchafi Lease Accounting, click here.
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