One of our Customers have a Lease contract that starts in mid of the month:
Commencement date: 19-Sep-2025
Termination date: 31-Mar-2028
- Monthly rental: LKR 3,650,040 (flat, no escalation), paid in arrears on month-end
- IBR: 13.25% p.a.
- First period payment: prorated stub of LKR 1,460,016 on 30-Sep-2025 (12/30 × monthly rental)
The issue
When we create this in IFS cloud, in amortization schedule IFS appears to discount each payment using full-month periods (n = 1, 2, 3, ...), while the customer's working paper uses fractional periods from the actual commencement date (n = 0.40, 1.40, 2.40, ...) to account for the 12-day stub at the start. So there is a difference in the Present Values calculated and the lease liability.
Hoping someone here has hit this before and can share how they handled it.
Customer Worksheet:
IFS:
Appreciate your help.