Lease Termination

You can terminate a lease at any time during the lease term.

If you terminate a lease before the expiration of the lease term, you must account for it by removing the right-of-use asset and the lease liability, with profit or loss recognized for the difference. If you terminate a lease at the end of the lease term, the lease liability balance and net book value of the asset are already zero, and no gain or loss needs to be recognized.

You can terminate an entire lease or only specific assets within a lease.

• Terminate an entire lease: enter termination details in the lease-level payment schedule.

• Terminate specific assets within a lease: enter termination details in the asset-level payment schedule.

When you terminate a specific asset within a lease, the lease-level schedule becomes inactive because the lease-level schedule is no longer the sum of all asset-level schedules.

After you post a lease termination transaction, the process automatically creates a draft retirement. You then review and post the retirement transaction.

Restrictions

After terminating a lease, you cannot:

• Roll back the lease termination transaction

• Reinstate the leased asset retirement