Computing Lease Liability

[JackBlack007]

Hello all,

I am using LeaseCalcs, an analysis software for leases, to generate a report for a provided lease. The lease has the following information (all from perspective of lessee):
- $1,714,491.60 rent/year
- Commencement date: 1/1/2020
- End date: 12/31/2039
- IBR = 8%
- 8mos free rent (1/1/2020 - 8/31/2020, no rent paid); implying $571,497, or 4/12 of $1,714,491.60, for the rent payment for year 2020

Please find below the sheet with calculations to arrive at lease liability. The lease liability showing on the LeaseCalcs report is $16,831,663. What am I doing wrong? Much appreciation to you all!

Thanks

https://drive.google.com/file/d/1G31UPk ... BcGC4/view

[Marek Muc]

Hi, it's best to start your calculations on the commencement date, see the rent free period example

If your cash flows and dates are set out correctly, you should arrive at the correct amount of lease liability. But the review of files is on you