How to forecast for a Right of Use Asset (ROU) and the associated Lease.
This is best handled by setting up the ROU Asset as an Intangible Asset to drive amortisation, and a Loan Liability for the lease to drive cash repayments (split into principal and interest components).
To do this in Castaway
- Create both a fixed asset element and a loan liability element
- In the fixed asset element enter the purchase value for the ROU, set the financing method to transfer % to loan and set the asset type to intangible asset
- Go to the Transfers tab (in the Fixed Asset) click on add transfer, picking the loan created in step 1, and click OK
- Enter 100% (assuming the entire purchase value is financed by the loan), then right click on the same cell and pick fill right to end. This will transfer the purchase value to loan
- Go to that loan element and set up the lease terms and conditions accordingly
- The P&L will then show Amortisation and Interest Expense