Calculation logic for value in Short term liability field in Lease liability amortization schedule

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Hi Experts,

Can anyone explain the calculation logic for short term liability field in lease liability amortization schedule.

Long term liability --acts as sum of principle amounts beyond 12 months. (not convinced as interest amounts are not included). I seriously doubt whether accounting standard truly wants org to disclose only principle amounts liable beyond 12 months ignoring interest.

But short terms liability calculation logic is bit tricky. Please throw some light on both short term long tern liability fields calculation logic.

Thanks

Pranav Tea K

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Hi Pranav,

The short term liability calculation is the current month's Accrued Interest plus the sum of the next 12 months of Principal Payments. Therefore, to your question above, interest is included in the short term calculation rather than the long term as the accrued interest is assumed to be paid in 1 year or less.

The long term liability calculation, as you've mentioned, is the sum of the principal payments 13 months and after.

For example, the items highlighted in yellow make up the calculation for Month 1's Short Term Liability while the items highlighted in green make up the calculation for Month 1st Long Term Liability:

Thanks!

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