NetLease - Supplemental Cash Flow Information
Purpose
This report provides a summary of cash flow information categorized by lease type, supporting the supplemental cash flow disclosures required for your lease financial statement footnotes.
Quantitative Disclosure Guidance
Below is the lease quantitative disclosure guidance:
ASC 842-20-50-4 For each period presented in the financial statements, a lessee shall disclose the following amounts relating to a lessee’s total lease cost, which includes both amounts recognized in profit or loss during the period and any amounts capitalized as part of the cost of another asset in accordance with other Topics, and the cash flows arising from lease transactions:
a. Finance lease cost, segregated between the amortization of the right-of-use assets and interest on the lease liabilities.
b. Operating lease cost determined in accordance with paragraphs 842-20-25-6(a) and 842-20-25-7.
c. Short-term lease cost, excluding expenses relating to leases with a lease term of one month or less, determined in accordance with paragraph 842-20-25-2.
d. Variable lease cost determined in accordance with paragraphs 842-20-25-5(b) and 842-20-25- 6(b).
e. Sublease income, disclosed on a gross basis, separate from the finance or operating lease expense.
f. Net gain or loss recognized from sale and leaseback transactions in accordance with paragraph 842-40-25-4.
g. Amounts segregated between those for finance and operating leases for the following items:
- Cash paid for amounts included in the measurement of lease liabilities, segregated between operating and financing cash flows
- Supplemental noncash information on lease liabilities arising from obtaining right-of-use assets
- Weighted-average remaining lease term Presentation and disclosure 9-9
- Weighted-average discount rate.
Below is an example of a Supplemental Cash Flow disclosure for Financial Statements. The report within NetLease is designed to fulfill this disclosure requirement.
Navigation
NetLease > Reports > Disclosure Reports > Supplemental Cash Flow Information > Run
Filtering
You can refine the report search by applying filters for subsidiary, currency, department, class, location, lease, accounting period, or date. Once the desired filters are selected, click Preview to view the disclosure.
Recommended Approach
Filter the accounting period to reflect the current reporting period.
Show FX Calculations Filter
This checkbox enables users to view lease balances in the lease currency, subsidiary currency, and consolidated currency. It also displays the exchange rates used to calculate these balances.
This option is useful for viewing and reconciling balances for leases that have undergone remeasurement or have been consolidated into a different subsidiary currency.
Results
After running the report, users will see the Supplemental Cash Flow Information amounts by lease type. Individual leases can be drilled down to view the related transactions. To download the report, click the Export button to save it as an Excel file.
FX Implications
If you have leases in different currencies, it can be helpful to see the rate implications by lease. Select the "Show FX Calculations" box in the filter section to show the additional columns associated with FX rate conversions.
The report will add additional columns for Lease to Subsidiary rate conversion (when the contract currency [aka currency on the lease] is different from the subsidiary currency) and columns for converting the Subsidiary currency to the Consolidated currency (the consolidated subsidiary is selected in the filters).
The Supplemental Cash Flow Report will use different rates for different lines of the report by design.
- ROU Asset Sections: These sections will always use the historical exchange rates. The rate is pulled from the schedule lines on the lease since the rate entered in the header section of the lease record can change with modifications.
- Cash Flows Paid Sections: These sections use the currency exchange rate on the date of transaction, which is the last day of the month in most cases.
While there is a filter option for the Consolidated Exchange Rate, this selection is only used for the consolidation rate column on the report. With Cash Flows, the rate will typically be "Average" so that is what the report will default to, but you can select other options. The "Custom" option will look at the currency exchange rates list and use whatever the rate was for that date.