Classify a lease and calculate the opening lease entries
Works through lease classification, the lease liability and right-of-use asset, and the first entries, with every assumption made visible.
The prompt
Help me account for a lease.
Framework: [ASC 842 / IFRS 16]
Lease terms: [PASTE - asset, commencement date, term, renewal/termination options, payment schedule and escalations, free-rent periods, purchase option, residual value guarantees]
Initial direct costs and lease incentives: [AMOUNTS]
Discount rate: [rate implicit in the lease if known, or our incremental borrowing rate, or the risk-free rate election if we're eligible]
Our policy elections: [short-term lease exemption, combine lease and non-lease components, etc.]
Steps:
1. Confirm it contains a lease (identified asset, right to control).
2. Determine the lease term, including options we're reasonably certain to exercise - explain the judgment.
3. Classify it (finance vs. operating under ASC 842; IFRS 16 lessees use a single model) and show each test.
4. Calculate the initial lease liability (present value of payments) and right-of-use asset.
5. Build the amortization schedule for the first 12 months.
Return:
1. Classification conclusion with the reasoning.
2. A calculation table I can rebuild in a spreadsheet (period, payment, interest, principal, liability balance, ROU asset balance).
3. Opening journal entry and the first monthly entry.
4. A list of inputs marked [CONFIRM] - especially the discount rate and term.
Show the math, don't just state results. Verify final numbers in a spreadsheet and with our auditors before booking.
Highlighted [brackets] are blanks to replace with your own details.
Fill in the blanks and use this promptMore Finance & Accounting prompts
What to fill in
- ASC 842 / IFRS 16
- AMOUNTS
- CONFIRM
How this prompt is built
This prompt follows the RTF structure (Role, Task, Format). RTF tells the model who to be, what to do and what shape the answer should take. It is the quickest structure that still gives noticeably better results than a bare request.
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