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      Why does my ASC 842 Footnote disclosure for Cash Flows not equal Cash columns in the Amortization Schedule?

      Per 842-20-50-4(g)(1), “Cash paid for amounts included in the measurement of lease liabilities, segregated between operating and financing cash flows.”  

      The footnote calculates the cash payments that have reduced the liability. This will equal the sum of columns J & K in the Amortization Schedule. 

      Other payments that are not included in this disclosure are:

      • Initial Direct Costs - These are cash outflows for investing activities.
      • Prepayments - Per KPMG Handbook on Cash Flows (See 14.2.60), there are two options for prepayments (payments/incentives received on or before commencement date), which should be disclosed and consistently applied:
        • Option 1: Cash outflows for investing activities. Payments are made to acquire the productive ROU asset.
        • Option 2: Classify lease prepayments in the same manner it expects to classify lease payments made after lease commencement.