Product
Calculation Engine
Precise, auditable lease accounting calculations — built around the requirements of IFRS 16 and FRS 102.
What the calculation engine produces
For each lease, the AuditLease calculation engine produces:
- Present value of future lease payments at the commencement date
- Initial recognition entries for the ROU asset and lease liability
- Period-by-period amortisation schedule for the lease liability (principal repayment and interest charge)
- Period-by-period depreciation schedule for the ROU asset
- Current and non-current split of the lease liability at each period end
- Remeasurement calculations when lease terms or payments change
Calculation methodology
Present value
The lease liability is calculated as the present value of future lease payments, discounted at the rate implicit in the lease or the lessee's incremental borrowing rate. Payments are discounted to the commencement date using the annuity formula, consistent with IFRS 16.26 and the equivalent FRS 102 requirement.
Effective interest method
The lease liability unwinds over the lease term using the effective interest method. Each period, interest is accrued on the opening lease liability at the discount rate, and lease payments reduce the liability. This produces a precise amortisation schedule that can be agreed back to the balance sheet.
Decimal precision
All monetary calculations use decimal arithmetic with correct rounding at each step. Floating-point arithmetic is never used for financial calculations. Rounding follows the MidpointRounding.AwayFromZero convention consistent with standard accounting practice.
Immutability
Completed calculation runs are immutable. Once journals have been posted from a calculation run, that run cannot be modified. Any change to a lease — a remeasurement, a modification, a change in assumptions — requires a new calculation run. The full history of all runs is preserved.
IFRS 16 and FRS 102
The calculation engine supports both IFRS 16 and the 2026 FRS 102 amendments. Each standard is implemented as a separate calculation path with the correct methodology for that standard. Entities using IFRS 16 and entities using FRS 102 can coexist within the same AuditLease account.
See the calculation engine in action
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