Rate Implicit Calculator
Quickly calculate the rate implicit in your lease.
Our tool is built to calculate the rate implicit under ASC 842, IFRS 16 and GASB 87 - and their respective legacy standards.
Encourage internal discussions regarding Lease vs. Buy or other complex financial decisions.
Easily show your auditors the inputs used in the rate implicit calculator.
About the rate implicit calculator:
The liabilities and assets required under the new lease accounting standards are calculated using the present value of remaining lease payments. The present value of these payments is most accurately presented using the discount rate the lessor charges the lessee, or the rate implicit in the lease. Lessors will always use the implicit rate but in most instances, lessees won’t have the information necessary to calculate the rate implicit in the lease and will need to utilize an incremental borrowing rate. Even when the lessee does not have all of the necessary inputs, it can still be helpful for the lessee to estimate the rate implicit in the lease.
Our tool is pre-built with the calculations needed for each of the main accounting jurisdictions – FASB, IFRS and GASB, both under legacy guidance and for the new lease accounting standards. You supply the inputs from your lease contracts, and our tool will calculate the rate implicit in the lease. All the information is provided to you via email – easy to keep as lease documentation, share with your auditors, or facilitate internal discussions with Treasury or FP&A.