12 March 2026
Residual roll-forwards that break before credit committee
Where residual percentages drift from the lease clause — and how administration applications quietly carry the old figure forward.
Residual pages look tidy until someone compares them to the clause that set the percentage. In leasing administration applications we review, the break usually appears after a mid-term amendment: the payment calendar is updated, the residual exhibit is not.
What to compare
Open the residual clause in each lease, the residual policy cited on the application summary, and the roll-forward table attached as an exhibit. The three should name the same base (capital cost, net investment, or another defined amount) and the same percentage or fixed balloon.
Typical drift
- Policy updated company-wide; older contracts still quote the prior percentage in the admin pack
- Early terminations removed from the payment schedule but left in the residual total
- Currency rounding applied on payments but not on the balloon line
What auditors ask for
A single residual bridge that starts at the prior approved figure, subtracts terminations, applies the current clause, and lands on the application amount. Without that bridge, credit is left to invent one under time pressure.