The creation of the journal entries in accordance with ASC 842 requires that professionals have a working knowledge of how to compute their lease amortization schedules.Ī simple definition of amortization would be a value reduction of an intangible asset over time. Real estate professionals employ a lease amortization schedule in order to amortize the principle of the lease over the lease term utilizing projected payments calculated on a straight-line basis for lease expenses. Lease amortization refers to the process of repaying an operating or finance leased asset over the course of time. Let's talk about the lease amortization schedule and how to handle its intricacies. Although it can be challenging, many CRE professionals are tasked with doing just that. The term "lease amortization" is one of such numerous CRE terms.Īmortizing a lease is the procedure of paying off a debt gradually through a series of payments scheduled at regular intervals. Commercial real estate (CRE), like many others, has its own jargon that can sometimes be challenging to understand.
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