What Is a Lease Schedule? Benefit and How to Create, 9 Facts

The lease schedule has become an important part of the property market. This blog contains information about the lease schedule for landlords as well as tenants. It also talks about the benefits of having a lease agreement in place before leasing a property.

What Is a Lease Schedule?

A leasing schedule is a document appended to the master lease agreement. Its principal role is to indicate when lease payments are due and in what quantities.

However, it may also contain additional information, such as a thorough description of the property, right, or item being leased and other stipulations.

What Is a Lease Schedule?

The lease conditions listed on a lease schedule vary according to local legislation, but often solely pertain to the lease’s duration, the amount of payments due, and the payment dates.

A lease is a legally enforceable agreement in which one party grants another party the right to use an asset in exchange for money. The party possessing the asset is known as the lessor, whilst the party paying to utilize the asset is known as the lessee.

A lease often governs the rental of residential space and autos, although practically any physical or intellectual property or right may be leased. The lessor establishes the lease’s legal terms and conditions, and the lessee accepts them by signing the lease.

A master lease is the initial leasing arrangement. A lease schedule may be prepared whenever a master lease is drafted.

The lease schedule specifies the dates of payments and other events, such as inspections, maintenance, and periods of renewal, that occur chronologically under the lease. This allows both parties to be aware of when payments are due and when other lease-related events occur.

What does a Lease Schedule Include?

Some leases include a lease amortization schedule. This is used for leases which give the lessee the option of purchase at the end of the lease with the price based upon the amounts paid during the lease as may happen with an automobile lease.

The lease amortization schedule is a table that shows how much of the lease payments are credited against the interest, how much are credited against the principal or purchase price and how much remains of the principal after each payment.

Each time the master lease is modified or altered, a new lease schedule is generated to reflect the modifications.

It may involve a mutually agreed-upon modification in payment amount or other parameters such as payment frequency, date of payment, or lease duration. Generally, a new lease schedule is only binding if both the lessor and lessee sign it.

What Is a Lease Schedule?

Advantages of Leasing

Leasing has several advantages that may be utilized to attract customers:

  • Loan agreements are more rigid than payment plans.
  • Because the lessor and lessee pay different tax rates, the expenses after taxes are cheaper.
  • Leasing entails whole financing of the asset’s purchase price.
  • For an operational lease, the firm will establish a cost rather than a liability, allowing it to get financing — a practice sometimes referred to as “off-balance-sheet financing.”

Disadvantages of Leasing

The agency cost problem is a significant drawback of leasing. In a lease, the lessor transfers all rights to the lessee for a fixed time period, presenting a moral hazard concern.

Because the lessee who controls the asset is not the asset’s owner, the lessee cannot exert the same degree of care as if it were his/her own. This difference between asset ownership (lessor) and asset control (lessee) is known as the agency cost of leasing. This is a fundamental principle in lease accounting.

How to create the lease amortization schedule and calculate your lease liability

Step 1: Create an Excel spreadsheet with these five columns

Create a new Excel spreadsheet and label its five columns Period, Cash, Expense, Liability Reduction, and Liability Balance, as shown below:

What Is a Lease Schedule?

Step 2: Enter the number of periods and cash payments

Enter the number of periods corresponding to the duration of the lease, beginning with 0. Then, enter the cash payments for each period. Due to the fact that payments are paid in advance, period 0 contains the initial payment of $1,000. The yearly payouts thereafter increase by 5% every year. Please see the example below:

What Is a Lease Schedule?

Step 3: Enter the expense formula

Enter “0” for expenditure in period 0 (because payments are made in advance). In Expense for period 1, enter the cell reference for period 0’s obligation balance and multiply it by 6%. Refer below.

What Is a Lease Schedule?

Step 4: Fill the expense column

Copy the expenditure formula for period 1 down to the remaining rows of the Expense table.

What Is a Lease Schedule?

Step 5: Enter the formula for liability reduction

For each obligation reduction amount, the formula is the corresponding cash payment minus the corresponding expenditure. Refer below.Copy the formula down the entire Liability Reduction column.

What Is a Lease Schedule?

Step 6: Enter the formula for liability balance

Input “0” above period 0 for the Liability Balance. In liability balance for period 0, put the calculation for the liability balance in the preceding cell subtracted by the liability decrease in period 0. This will equal the liability balance from the prior period, less the current liability decrease (see below).

What Is a Lease Schedule?

Step 7: Fill the remaining liability balance column

Copy the formula for the obligation balance in period 0 for the remaining rows of Liability Balance.

What Is a Lease Schedule?

Step 8: Perform “What-If Analysis” on the liability balance

Select the account balance for period nine. Go to the “Data” tab, followed by the “What-if Analysis” tab, and then pick “Goal Seek” from the Excel menu bar.

What Is a Lease Schedule?

Step 9: Set liability balance value to 0 by using goal seek

In the dialog box that appears, ensure “Set cell” is set to the cell representing the liability balance for period 9, enter 0 for “To Value,” and for “By changing cell,” enter the cell reference representing the liability balance for the period above period 0. Refer below.

What Is a Lease Schedule?

Step 10: Click “OK”

To execute the goal seek analysis in Excel, click “OK.” Excel will give the initial liabilities balance, and your amortization plan will be automatically generated based on the calculations you enter. Refer below.

What Is a Lease Schedule?

In this example, the present value of a 10-year lease with yearly payments of $1,000, escalations of 5%, and a rate intrinsic to the lease of 6% is $9,586.

What is a Lease Amortization Schedule?

A lease amortization schedule is a table that displays lease payments in addition to interest and amortization calculations, often on a monthly basis, throughout the duration of a lease. Lease schedules are frequently produced at the outset of a lease since they serve as a reference for estimated payments over the duration of the lease.

For instance, an accountant may frequently utilize a lease amortization schedule as a guide to ensure that payments, interest, and amortization are reported accurately on financial statements throughout the lease period.

How Do I Get an Amortization Schedule?

We have exciting news! Clearly, creating a lease amortization schedule manually using spreadsheets is difficult. With the click of a button, LeaseCrunch provides users who are weary of inaccuracies and time-consuming spreadsheets with a precisely calculated amortization plan in Excel.

The program from LeaseCrunch was recognized as one of the best new products of 2022 for a reason: it can automatically generate an amortization plan that can be downloaded into Excel, relieving you of the burden of manually calculating and maintaining complex formulae and spreadsheets.

However, our software does more than that. The LeaseCrunch software is:

  • Automated quantitative footnote disclosures aid auditors in developing footnotes more quickly.
  • Provides categorization and lease term data in bite-sized chunks.
  • Simplifies FASB, GASB, and IFRS election of policy templates

What Is a Lease Schedule?

Furthermore. Range up a demonstration immediately to view the whole set of features and get an idea of how simple it is to create a leasing amortization plan and execute lease accounting.

Lease Amortization Schedule FAQs

Can You Amortize Lease Commissions?

Lease commissions should be accounted for as an initial direct cost that is applied to the ROU asset and then amortized over the lease’s term.

Do Leases Get Amortized?

All leases must now include some kind of amortization/depreciation on the books, under the new lease accounting requirements, because they all contain a ROU asset.

Are Operating Leases Amortized?

Under the new lease accounting standard, the ROU asset must be amortized over the lease period for operational leases, contrary to the misconception held by some.


A lease schedule is an agreement between two parties that defines the relationship and terms under which one party will provide services or property to another.

Leasing provides owners with flexibility by allowing them to rent out the space they have available without having to wait for an interested tenant.

Leases can be for any length of time and in many cases are renewable. Leases are created for commercial or residential properties.

Lease agreements usually include a lease term, rent, a security deposit, additional charges such as utilities, and other terms and conditions.

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