Why is the first payment missing from the Lease Liability?
Under ASC 842, GASB 87, and GASB 96, the first lease payment made at the beginning of the lease is excluded from the Lease Liability because it is not a future payment, and instead is included in the Right-of-Use (ROU) Asset calculation.
Why is the first payment missing from the Lease Liability?
A payment made at the beginning of the lease is excluded from Lease Liability
Under ASC 842, GASB 87, and GASB 96, the liability is calculated as the present value of committed future payments. When a payment is made at the beginning of the lease, it is not considered a future payment and is therefore excluded from the Lease Liability calculation and instead is included in the ROU Asset calculation.
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