> ## Documentation Index
> Fetch the complete documentation index at: https://docs.spacebaseapp.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Company accounting settings

> Configure accounting dates, calculation methods, currency conversion, and discount rates.

You need permission to manage company accounting to change these settings.

Open **Accounting > Settings**, then click **Edit Accounting Settings**. Make your changes and click **Update**.

These settings control company-wide accounting behavior. Review changes with the team responsible for your accounting policy before updating them.

## Accounting dates and fiscal year

* **Transition date:** Identify when your company transitioned to its accounting standard; this supplies the transition point for lease accounting.
* **Accounting lock date:** Prevent users from creating accounting data with GL start dates on or before this date. For example, a June 30 lock date blocks a June 30 GL start date but allows July 1.
* **Fiscal year:** Set the month and day that each quarter begins.
* **Fiscal year starts before calendar year:** Control fiscal-year naming. For example, with a July 1 start, selecting this option labels July 1, 2023 as the start of FY24; leaving it clear labels that date as the start of FY23.
* **Accounting standard:** Appears only if your company allows users to edit the standard.

## Calculation and reporting options

| Setting                                                        | What it controls                                                                                                                                                                                               |
| -------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| **Prorate lease expense**                                      | Adjusts lease expense when a lease covers only part of a month, such as a lease beginning mid-month.                                                                                                           |
| **Prorate interest expense**                                   | Accounts for partial months in both interest expense and the net present value calculation used for lease liability. A mid-month start can therefore affect the initial liability as well as monthly interest. |
| **Use custom conversion rate**                                 | Uses company-supplied rates for accounting and reporting. Maintain those rates in [Currency conversion rates](/general/company-settings/currency-conversion).                                                  |
| **Display cash columns in GL Reconciliation report**           | Adds Cash and Lease Expense less Cash to GL Reconciliation so you can compare cash payments with recognized lease expense.                                                                                     |
| **Display dedicated TIA amortization schedule column**         | Separates tenant improvement allowance payments into their own amortization schedule column so you can identify them separately.                                                                               |
| **Prevent negative ROU asset**                                 | Changes the treatment of calculations that would produce a negative ROU asset. The offset may use an incentive liability or gain/loss treatment, depending on your company configuration.                      |
| **Prevent negative current lease liability balance**           | Keeps current lease liability at zero when it would otherwise become negative and applies the excess to non-current lease liability.                                                                           |
| **Require note when reviewing or approving accounting leases** | Blocks completion of review or approval until the user provides a note, giving your team a written record of that step.                                                                                        |

**Current lease liability calculation method** has two options:

* **Use principal payments from amortization:** Sum payments less interest expense over the next 12 months.
* **Use discounted lease payments:** Use the net present value of the next 12 months of lease payments.

### Functional currency conversion

**Monetary functional currency conversion logic** determines the exchange-rate date used to convert monetary entries from contract currency to functional currency:

* **Use entry dates** selects the rate date from each entry.
* **Use report end date** uses the report's ending date.
* **Use the earlier of the effective date or entry date** selects whichever of those two dates comes first.

For example, a June entry in a report ending September 30 can use a June rate or a September 30 rate depending on this choice. The source entry amount is the same; the converted amount can differ.

**Nonmonetary functional currency conversion logic** controls how the right-of-use asset is converted when a lease is modified:

* **Layered:** Convert the change in the right-of-use asset using the exchange rate on the modification effective date.
* **Single exchange rate:** Remeasure the entire right-of-use asset using the exchange rate on the modification effective date.

### Discount rates

The **Discount Rates** section on **Accounting > Settings** lists the country, start date, lease term, and rate for each entry.

Click **Create Discount Rate** to add an entry, or select a row to edit it. Enter the term in months and the rate as a percentage, such as `8.25` for 8.25%. Use **Import Discount Rates** when adding rates in bulk.

For the broader accounting workflow, see [Accounting Leases](/accounting/leases).