Why must the Start Date of the lease be on or after the Initial Application Date?

Is the contract Start Date prior to the Initial Application Date?

When entering leases in LeaseCrunch, the start date of any transition leases cannot be before the Initial Application Date. This does not mean the Initial Application Date should be changed. This is the correct functionality of LeaseCrunch.

The LeaseCrunch calculations use the lease start date to determine the correct ROU Asset and Lease Liability when recording the leases in the transition year.

All leases that commenced prior to when the standard is adopted for your organization will start on your Initial Application Date. 

Example:

Lease Term: July 1, 2020 through June 30, 2025

Initial Application Date: January 1, 2022

Start Date in LeaseCrunch: January 1, 2022