- What is Termination?
- How to Terminate Leases in LeaseGuru
- What is the difference between Deleting and Terminating in LeaseGuru?
- Do terminated lease count towards my total lease count in LeaseGuru?
What is Termination?
Terminating the lease is simply ending the lease early. The financial impact of the lease beyond the termination date will be removed and the journal entry for the month and year of termination will be automatically adjusted for the termination. Terminating a lease cannot be undone.
The purpose of the termination process is to generate a journal entry to reflect any cash payment made (or received) to terminate the lease and the reversing entry to remove the Lease Liability and ROU Asset balances as of the termination date off the books.
Many lease agreements may include an option for either lessees or lessors to terminate the agreement prior to the end of the original lease term. Lease termination options can include notice requirements, termination penalties, and adjustments to previously established rental terms, among others.
How to Terminate Leases in LeaseGuru
To terminate a lease in LeaseGuru, follow these instructions:
- Select an existing lease from your lease dashboard.
- Once the lease is open, select "Action Menu".
- Choose "Terminate" from the action menu dropdown and "Continue" to terminate the lease.*
- Enter the terminate date and any net cash paid/credit received.
*Note: Once you terminate a lease, you cannot undo this in LeaseGuru.
What is the difference between Deleting and Terminating in LeaseGuru?
A lease termination is a type of lease modification. When the user terminates a lease, a journal entry is generated to reflect the termination and the lease is removed from all reports, journal entries, and activity from the date of the termination forward.
Deleting a lease removes it permanently from all past, present, and future reports, journal entries and activity. LeaseGuru does not retain records of any deleted leases. This function should only be used if the user wants to remove all traces of the lease from the system.
Do terminated lease count towards my total lease count in LeaseGuru?
Yes, if you terminate a lease, then it will still count towards your total lease count. If you would like the lease to not count, then you will need to delete it.
For more information about lease modifications, check out this article.