Weighted-average remaining lease term and weighted-average discount rate are portfolio disclosures. They summarize the recognized lease population using stated weights; they are not simple averages of contract rows.
Reperform the population calculation
Define the population, measurement date, lease class, remaining-term convention, rate field, and weight. A liability-weighted discount rate gives larger recognized obligations more influence than smaller ones. A weighted remaining term commonly reflects the relative size of remaining lease payments or liabilities under the entity's documented method. Reconcile the population totals to the lease note and investigate excluded, duplicated, or stale records.
A large lease balance should influence a liability-weighted rate more than a small one. Giving every contract one equal vote would answer a different question. The reported rate describes the approved lease population under the stated weighting. It does not establish the company's cost of capital.
The measure is sensitive to population and weighting choices, so disclose and preserve both. It is also different from an occupancy forecast. Read the quantitative disclosure requirements in ASC 842-20-50-4 and the maturity information in ASC 842-20-50-6.
Put the concept to work
Analyze this concept
- Reperform supplied weighted-average remaining term and discount-rate disclosures from an aligned lease population and interpret what they reveal and do not reveal about duration, financing cost, and renewal exposure.
Learning resources
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Build on these ideas
- Lease presentation and disclosure — Evaluate
To analyze this concept: Required. The metrics are disclosure outputs whose population and basis must tie to the lease note.