Table of Contents

Administration | Users

User Roles:

Below is the list of user roles and their associated permissions.

Administration | Reporting Entity

Reporting Entity:

Reporting Entity is the financial reporting entity for which you produce financial statements. At your organization, a Reporting Entity might be known as a company, business unit, subsidiary, fund, institution, organization, or office. 

Under the Administration/GL Accounts tab, each reporting entity has its own set of GL Accounts. 

There is no hierarchy for Reporting Entities. By default, all Reporting Entities are included in reporting however the user can filter to select one or a combination of Reporting Entities.

Accounting Standard: 

Select one of the following Accounting Standards at Administration/Reporting Entity of either FASB ASC 842, IFRS 16, or FRS 102.

If a lease needs to be reported under multiple standards (e.g., FASB ASC 842, IFRS 16, or FRS 102), we recommend creating one Reporting Entity per standard and enter the same lease separately under each Reporting Entity due to the differences between standards (discount rate, classification, etc.). For more information, please contact support@crunchafi.com.

Initial Application Date:

Summary Guidance: The Initial Application Date is the beginning of the earliest period presented in the financial statements in which the lease standard is first applied. This will either be your Initial Adoption on the effective date of the applicable lease accounting standard (ASC 842, IFRS 16, or FRS 102) or Post-Adoption when transitioning from another solution, due to M&A activity, or a new business entity.

Initial Adoption: Initial Application should be based on the applicable standard's effective date:

• ASC 842: fiscal years beginning after December 15, 2021 (public companies: December 15, 2018)

• IFRS 16: fiscal years beginning after December 15, 2018

• FRS 102 (amended September 2024): fiscal years beginning on or after January 01, 2026

Post-Adoption: When adding a new Reporting Entity, determine the Initial Application Date based on one of the following scenarios:

• Due to transition from other solution (e.g., software, spreadsheet, etc.): Users have the option to use the following (for additional guidance, visit our Initial Application Date Calculator):

  • Beginning of the current or previous fiscal year: High-level of confidence in the accuracy of your lease accounting prior to transitioning

  • Initial Adoption: Re-implement as of the effective date (see Initial Adoption above)

• Due to new business entity: The Initial Application Date is the 1st of the month the business is created.

• Due to mergers and acquisitions: Managed on a case-by-case basis. Consult support@crunchafi.com for specific guidance.

Technical Guidance:

Local Currency:

Summary Guidance:  Local Currency is the currency used to pay your lease obligations (typically the currency used in the entity's particular geographical location).  Local Currency is used in the following tabs:

• Administration/Reporting Entity: User selects the Local Currency default for your Reporting Entity.

• Add Lease: The Local Currency will prefill after selecting the Reporting Entity, which the user can update if needed.   

• My Leases: Local Currency reports can be exported by selecting from the Local Currency tab.

Functional Currency:

Summary Guidance: Functional Currency is the currency of the primary economic environment in which the entity conducts its business. The Functional Currency is usually either the Local Currency or the currency of the parent company.

Technical Guidance:

Administration | Policies

Require Review + Approval for every new Lease created:

When this policy is required, the following is true for any new lease created or any changes to existing leases when the policy was required at lease creation:

• Requirement: have at least 2 active users

• Review Tab: When adding a lease, the Review step only appears when the policy is selected.

  • Note: Users can optionally choose to send an email notification to reviewer(s) when a lease is ready for review. A notification cannot be sent to the user entering the lease. The reviewer must be a user within the software.

• Incomplete Status: Before submitting a lease for review, the lease remains in Incomplete status even if all required data fields are entered.

• Review Status: After submitting a lease for review, the lease status changes from Incomplete to Review.

• Reviewer: Any user can Review + Approve a lease in Review status; however, the last person to modify cannot approve the lease.

• My Leases: To approve, click the vertical ellipses on the applicable lease to select “View & approve.” On the View screen, review the data and select Approve. Approving a lease changes the status from Review to Complete, which allows the lease to be exported.

• Reporting: Leases in Incomplete or Review statuses cannot be exported under the My Leases tab.

• Lease Edits & Revisions: When a lease is edited or revised, the lease returns to either the Incomplete or Review status.

  • Note: The policy selected when a new lease is created will persist. If the policy was enabled when a lease was created and subsequently disabled, Review + Approve would still be required for any future changes to that lease.

Administration | GL Accounts

Fixed Asset:

Fixed Asset GL Accounts are only used if you have a lease with a ROU Asset Life greater than the Lease Term (entered on the Description & Term tab). The Fixed Asset Account will be used to transfer the remaining ROU Asset balance in the final journal entry. 

GL Accounts for Existing Balances under Previous Lease Accounting Guidance:

GL Accounts located in the Administration/GL Accounts menu under the Existing Balances Under Previous Lease Accounting Guidance section are used to remove balances from your existing balance sheet upon initial adoption of ASC 842, IFRS 16, and FRS 102 or when transitioning into Crunchafi Lease Accounting from another lease accounting solution. After entering or modifying the default GL Accounts, follow the steps below:

For existing Lease Liabilities:

1. Go to Add Lease screen, complete Description & Term.

2. Under the Lease Payments & Classification section, complete required fields, then select a Liability GL Account from the existing balances dropdown.

3. Enter the existing balance as a positive value.

The initial journal entry will remove the existing liability by debiting the balance entered on the Add Lease screen. For lessees, the offsetting credit will be to the ROU Asset. For lessors, the offsetting credit will be to Revenue or Deferred Rent depending on the circumstances.

For existing Lease Assets:

1. Go to Add Lease screen, complete Description & Term, then under the Lease Payments & Classification section.

2. Select an Asset GL Account from the dropdown.

3. Enter the existing balance as a positive value.

The initial journal entry will remove the existing asset by crediting the balance entered on the Add Lease screen. For lessees, the offsetting debit will be to the ROU Asset. For lessors, the offsetting credit will be to Revenue, Deferred Rent, or Initial Direct Cost Asset depending on the circumstances.

Lessee Examples

General Ledger Accounts for Revisions:

The Revisions section of the Administration/GL Accounts menu has two GL Accounts:

1. Suspense Account for Transferred Balances

2. Gain/Loss Account

When creating a revision, the software will freeze the previous version of the lease and then allow you to change parameters that only affect the lease on/after the start date of the Revision

Administration | Currency

Foreign Exchange Rates:

Summary Guidance:  When entering foreign exchange rates in the fields “Currency (From-To),” the “From” is the currency you are starting with and the “To” is the ending currency (i.e. the currency you are translating to).  For example:

• From = Local Currency of Lease; let’s assume USD

• To = Reporting Currency of a reporting entity; let’s assume EUR

• “Currency (From-To)” = USD - EUR  (see below: $1 USD = 0.86€ EUR at EOM at 2025-01)

Open

EOM Rate = Used to translate ending balance sheet values

Ave Rate = Used to translate the transactions made throughout the month

Download the files below displaying the translation of each column in the Amortization Schedule.

Lessee:

• FASB ASC 842/IFRS 16: Functional & Final Reporting Currency Translation_Lessee_FASB IFRS.xlsx

• FRS 102: Functional & Final Reporting Currency Translation_Lessee_FRS.xlsx

Lessor:

• FASB ASC 842/IFRS 16: Functional & Final Reporting Currency Translation_Lessor_FASB IFRS.xlsx

• FRS 102: Functional & Final Reporting Currency Translation_Lessor_FRS.xlsx

Foreign currency translation is guided by FASB ASC 830, IAS 21, and FRS 102 Section 30.
Monetary assets and liabilities (cash, accounts receivable, accounts payable, and long-term debt) are measured at the end of each reporting period based on the then current exchange rates, resulting in foreign currency gains and losses, which are recorded in current period net income. 

Nonmonetary assets and liabilities (inventory and property, plant, and equipment) are initially measured using historical exchange rates. Because there should be no further reason for translation, all aspects of the ongoing accounting for these items (e.g., depreciation, impairment, and lower of cost or market) should be measured in terms of the operation’s functional currency. In other words, if you translated it once at the Start Date of the lease, there is no need to further translate to current period rates.

Technical Guidance:

My Leases

Lease Status:

Complete: This status indicates all required fields are entered. If the Require Review + Approve policy is enabled, this lease was also approved by a reviewer. Leases in Complete status can be exported for reporting.

Review: This status is only available if the Require Review + Approve policy is enabled under Administration/Policies. The Review status requires a reviewer (other than the user who last edited the lease) to approve the lease. Leases in a Review status cannot be exported for reporting.

Deleted: This status is when a lease has been deleted. Leases in a Deleted status cannot be exported for reporting.

Incomplete: This status indicates that not all required fields are entered. Leases in an Incomplete status cannot be exported for reporting.

Data By Lease:

This selection produces a tab in the export called “Data By Lease” with values for each selected lease from the GL Start Date to the GL End Date. This feature is available for the following reports:

• Journal Entries

  • “Data by Lease” tab replaces the “Data” tab.

  • Journal entry values are aggregated per lease with each revision shown separately, sorted in descending modified date order.

  • Alternating cell colors indicate separate leases. If a lease has been revised, the original version will have the same cell colors as the revision.

  • Multiple local currencies in one report are supported for the Data by Lease report.

• Amortization Schedule

  • Additional “Data by Lease” tab supplements the “Data” tab.

  • Amortization values are presented and aggregated per lease with each revision shown separately, sorted in descending modified date order.

Foreign Currency Translation (Functional Currency & Reporting Currency):

Summary Guidance: Ending balance sheet values are generally translated at EOM rate. All other transactions are translated at the Average rate, except for balances translated to the Functional Currency at the Historical fx rate.

Administration | Currency provides instruction for how to enter EOM and Average foreign exchange rates.

Download the files below displaying the translation of each column in the Amortization Schedule.

Lessee:

• FASB ASC 842/IFRS 16: Functional & Final Reporting Currency Translation_Lessee_FASB IFRS.xlsx

• FRS 102: Functional & Final Reporting Currency Translation_Lessee_FRS.xlsx

Lessor:

• FASB ASC 842/IFRS 16: Functional & Final Reporting Currency Translation_Lessor_FASB IFRS.xlsx

• FRS 102: Functional & Final Reporting Currency Translation_Lessor_FRS.xlsx

Foreign currency translation is guided by FASB ASC 830, IAS 21, and FRS 102 Section 30.
Monetary assets and liabilities (cash, accounts receivable, accounts payable, and long-term debt) are measured at the end of each reporting period based on the then current exchange rates, resulting in foreign currency gains and losses, which are recorded in current period net income. 

Nonmonetary assets and liabilities (inventory and property, plant, and equipment) are initially measured using historical exchange rates. Because there should be no further reason for translation, all aspects of the ongoing accounting for these items (e.g., depreciation, impairment, and lower of cost or market) should be measured in terms of the operation’s functional currency. In other words, if you translated it once at the Start Date of the lease, there is no need to further translate to current period rates.

Technical Guidance: