EZ13 data entry tips #1

One of my intentions for this blog has been to provide usage notes for EZ13, FCS's lease accounting software for capital and operating leases, but I’ve ended up generally more focused on what’s happening with the FASB & IASB as they revised the lease accounting standard, because so much has been happening in that regard. Today, though, I’m going to take a moment to offer some tips on using EZ13.

There are a number of features designed to make entry of leases faster and more convenient, but many of them aren’t necessarily obvious. (They're described in the documentation, but I harbor no illusions about how much documentation is read.) I’m going to go through a few of these today:

Copy a lease

You may have several leases that are the same or almost the same (several copiers leased at the same time, for instance). EZ13 allows you to copy all the data entered for a lease to create a new lease record. Use menu item Lease/Copy; all the information from the current lease is copied to the new record, except only for the lease number (since that must be unique).

Rent Escalation clauses

Many real estate leases call for an automatic increase of rent every year or every 5 years. The increase might be a percentage or a dollar amount. (Note that if the increase is based on future events, such as the change in the Consumer Price Index, that’s considered contingent rent, and only the base rent is considered minimum lease payments for FAS 13 reporting purposes; the contingent rent is simply expensed when incurred.) Rather than needing to calculate and enter each rent amount, EZ13 allows you to specify the base rent, the increment (in dollars or percent), and when the change happens. You can separately specify the executory cost, which might remain the same or change with a different increment. Use menu item Lease/Rent Escalation. Note that the rent escalation period does not have to cover the entire life of the lease.

Level Principal Rent

Relatedly, some leases are set up so that the same amount of principal is repaid with each lease payment. Since the interest is constantly decreasing as the principal decreases, this means that each rent payment is different. Entering that for a 36- or 60-month lease can be pretty tedious! EZ13 can set up the full set of payments using menu item Lease/Level Principal Rent, you just enter the initial principal, interest rate, and length of the lease (with an option for additional fixed rent, such as a service charge that's added to each payment, and executory costs).

I’ll describe some additional input convenience features tomorrow.