Lease payments
The payments made by the lessee to the lessor for the right to use the underlying asset.
Definition
Lease payments included in the measurement of the lease liability comprise fixed payments (including in-substance fixed payments), variable payments based on an index or rate, amounts expected to be payable under residual value guarantees, purchase option exercise prices if reasonably certain, and termination penalties if the lease term reflects exercise of a termination option.
Why it matters
Only certain payments are included in the lease liability measurement. Variable lease payments based on usage or performance are excluded and expensed as incurred.
In AuditLease
AuditLease requires the user to input the payment schedule including amount, frequency, and timing. It validates the schedule and uses it as the basis for all calculations.
Related terms
Put this into practice with AuditLease
AuditLease handles IFRS 16 and FRS 102 lease calculations, statutory note generation, journal entries, and audit evidence — so your team spends less time on spreadsheets and more time on judgements.
This definition is for general information only and is not accounting or legal advice. Definitions are based on IFRS 16, FRS 102, and associated guidance published by the IFRS Foundation and the Financial Reporting Council. Users should refer to the applicable accounting standards and their professional advisers for judgement-specific matters.