What is a transition rate?
Transition rates are a major aspect of correctly accounting for leases under the new lease accounting standards. The transition rate is the lease-specific transition rate used to determine the present value of the lease payments for leases that continue past the month of transition. The discount, interest, and borrowing rates are all transition rates.
How to enter/modify transition rates in LeaseGuru
During lease entry, the rate entered into the Transition Rate (GAAP) field in the “Base Rent” section rate will apply to any operating leases that start prior to the transition date.
To modify the transition rate for an existing lease, open the lease and select the “Action Menu” dropdown. Next, select amend to either update details entered incorrectly during lease entry or make a point-in-time modification.