Lease Accounting Process
The below diagram shows the pictorial view of the lease accounting business processes and all the kind of transaction and functionality we can perform in this module.
Below is the navigation and steps on the lease creation process:
Navigator → Lease Accounting → Leases
Click on plus icon
In the Overview section, select accounting classification like operating lease and financial lease.Select the lease start date and end date. Amortization start date defaults from the lease start date but we can change. Enter the Discount Rate index.
Navigate to Assets Tab
Click on plus icon
In the Asset section, we have to enter asset number, location, asset start date and end date.
Once the asset details are entered, click on Save and Close button.
Navigate to Payments Tab
Click on plus icon
Select the appropriate payment template, supplier, supplier site, payment frequency and amount.
Once all the payment information are entered, click on save and close button.
Navigate to Actions
Click on Validate
Navigate to Actions
Click on Generate Schedules
Review the Schedules for Amortization
Review the Schedules for Payment
Submit for approval
Approval Worklist
The Approver view from the notification and approves it
Search for the lease and after opening the lease, click on attach lease details report
Click on Process Lease Payment task
Enter the parameters like process type: Lease Payments, Business unit, payment processing as Approve, Export to payables as Yes, Launch import payable invoice as Yes
Click on Submit
Navigator → Payables → Invoices → Manage Invoices
To review the lease invoices we should follow the above navigation and search the invoices in manage invoices screen.
Click on Process Lease Payment task
Enter the following parameters like process type as Accruals and business unit.
Click on Submit
Enter the following parameters like subledger application as lease accounting, ledger, end date, accounting mode as final, report style as detail transfer to GL as Yes and Post to GL as Yes
Click on submit
Lease Booking Accounting Entry:
Lease Expense Accounting Entry:
Lease Payment Approval Accounting Entry:
List of reports available in Lease accounting module:
| 1. | Lease Liability Analysis Report |
| 2. | Lease Transactions and Balances Report |
| 3. | Lease Abstraction Details Report |
| 4. | Lease Disclosures Report |