PRODUCT|LEASE & DERIVATIVE ACCOUNTING

ASC 842 Lease Accounting &
ASC 815 Derivative Valuation
for Energy Contracts.

Dual-track accounting engine for energy assets. Finance and operating lease classification, derivative mark-to-market with Day 1 zero-out, mid-term remeasurement, and journal entries formatted for SAP or NetSuite.

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HOW IT WORKS

From Contract Inception to Automated Month-End Journal Entries

STEP 01
Select Contract Type

Derivative only, Lease only, or Both (embedded derivative in lease).

STEP 02
Set Classification & Inputs

Choose Finance or Operating (leases), enter payment schedule, discount rates, asset type.

STEP 03
Calculate

Engine computes NPV, amortization schedules, Day 1 coefficient, ROU asset, and lease liability simultaneously.

STEP 04
Export Journals

Download month-end journal entries in generic CSV, SAP, or NetSuite format.

INPUTS

Inputs: Lease Classification, Payment Schedules & Discount Rates

No hidden defaults. You provide the IBR, the payment schedule, and the classification. The engine does the math — transparently.

Contract Type

Derivative only, Lease only, or Both (dual-track for embedded derivatives in leases).

Platform UI · Selection
Lease Classification

Finance or Operating — must be selected first, determines all downstream accounting treatment.

Platform UI · Finance / Operating
Payment Schedule

Fixed payment amount, frequency (monthly/quarterly/annually), escalation schedule with effective dates.

Platform UI · $/Period + Escalation
Discount Rates

IBR for leases (user-provided), discount rate for derivatives (user-provided) — no hidden defaults.

Platform UI · % Annual
Asset Type

Natural Gas Plant (30yr useful life), BESS (15yr), Solar (25yr), Wind (20yr), or custom.

Platform UI · Preset or Custom
Forward Curve

For derivative legs — upload CSV of period/price pairs or fill in directly. Must cover full contract term.

CSV · Period/Price Pairs
Net ABV & Early Termination

Optional asset-based valuation for impairment monitoring. Optional exercise date, penalty, and 'reasonably certain' toggle.

Platform UI · Optional Fields
OUTPUTS

Outputs: Amortization Schedules, Journal Entries & Derivative P&L

Amortization schedules, journal entries, derivative P&L, and impairment monitoring — all from a single contract setup.

📋
Full Amortization Schedule
Every period showing liability balance, interest expense, principal reduction, ROU depreciation, and total expense
📒
Journal Entry Package
Balanced debits and credits for each month-end close
📈
Derivative P&L
Raw MTM vs Adjusted P&L (after Day 1 coefficient), with amortization schedule
⚠️
Impairment Monitor
ROU Asset vs Net ABV with warning flag, on-demand impairment journal entry
🔄
Remeasurement Events
When escalations trigger, see the liability change, ROU adjustment, and recalculated go-forward schedule
📥
Export Files
Generic CSV, SAP posting format, NetSuite journal import format
METHODOLOGY

Calculation Methodology: Lease Liability, ROU Asset, Day 1 Zero-Out & Remeasurement

Every journal entry balances. Every calculation follows ASC 842 and ASC 815 to the letter. Full methodology documentation is available during the sales process.

Lease Liability (ASC 842)

Present value of all expected fixed payments discounted at your incremental borrowing rate. Handles escalation schedules and early termination with penalty adjustments.

ROU Asset & Depreciation

Right-of-use asset initialized at lease liability value, then depreciated based on classification. Finance and operating leases diverge in how expense is recognized over the term.

Finance & Operating Schedules

Finance leases produce front-loaded expense (interest + depreciation). Operating leases produce level expense each period. Both generate complete amortization schedules with every line item.

Derivative Valuation (ASC 815)

Mark-to-market against your forward curve with proper discounting. Supports both commodity and embedded derivative structures across the full contract term.

Day 1 Zero-Out & Coefficient

Eliminates phantom P&L on deal inception. The coefficient amortizes over the contract term via volumetric or straight-line methods, ensuring reported MTM reflects real economics.

Remeasurement & Impairment

Escalation events automatically trigger liability recalculation and ROU adjustment. Impairment monitoring compares carrying value to net ABV with on-demand journal entry generation.

USE CASES

Use Cases: PPA Accounting, Tolling Agreements & Embedded Derivative Classification

Energy Asset Owners

Manage ASC 842 compliance for tolling agreements, land leases, and equipment leases across a portfolio of gas, solar, wind, and storage assets. One engine handles all asset types.

Renewable Developers

Price embedded derivatives in PPAs correctly. Day 1 zero-out ensures no phantom P&L on deal inception. Volumetric amortization tracks actual delivery.

CFOs & Controllers

Month-end close in minutes instead of days. Journal entries export directly to SAP or NetSuite. Impairment monitoring catches issues before the auditors do.

Accounting Firms / Auditors

Verify client lease and derivative accounting with transparent methodology. Every formula is documented. Every journal entry balances.

Get the accounting right — automatically.

ASC 842 leases and ASC 815 derivatives in one engine. Journal entries ready for your ERP.

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