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Author's profile photo Nishi Parikh

Configuration of Lease Accounting

Hello Readers,


I am here writing blog about not so common yet useful process of Lease accounting.

Starting with brief over-view about the process of Lease accounting.

Leased asset remains property of the lessor. They are special form of rented asset.This blog covers how Lessee can handle Leased asset in FI-AA.

This configuration is from the point of view of Lessee. There are two type of leasing.

  1.  Capital Lease
  2.  Operating Lease

Capital lease is shown in balance sheet and operating lease is treated as expense and not shown in balance sheet. Configuration steps are same for both, the difference arrive while settling the asset. Configuration is covered in this blog and other process will be covered in part 2.





1. Configuration

1.1 Create Account Determination

SPRO – Financial Accounting (NEW)- Asset Accounting – Organisation Structure-Asset Classes-Specify Accounting Determination


                                        Account determination of Lease account

1.2 Create screen layout

SPRO – Financial Accounting (NEW)- Asset Accounting – Organisation Structure-Asset Classes- create Screen Layout


                                                        Screen layout for Lease account

1.3 Make number range

SPRO- Financial Accounting (NEW)- Asset Accounting – Organisation Structure-Asset Classes-define number range interval (AS08)


                                                                     Number range for Lease asset

1.4 Create Asset class (OAOA)

SPRO- Financial Accounting (NEW)- Asset Accounting – Organisation Structure-Asset Classes-Define Asset Class

Make new Asset class and assign account determination, number range and screen layout


                                               enter detail as mention in screenshot


1.5 Creation of account –FS00


                                                            Create GL accounts

1.6 Integration of account (AO90)

SPRO-Financial Asset-Asset Accounting-integration with GL account- Assign GL Account



                                                              Assign the GL accounts


                                           Enter GL accounts for depreciation


                                           Enter account for interest paid


1.7 Determine Depreciation Area (OAYZ)


                                                           Maintain depreciation area

1.8Field status for leasing tab in Asset Master

SPRO-Financial Asset-Asset Accounting-Master data- Screen layout- Define Screen layout for Asset master















                          Choose Lease asset Screen layout


                                                Click on Leasing field


                                                 Select optional for all field


2 Activate interest calculation

2.1 Depreciation area

Asset Accounting – Integration with the General Ledger – Define How Depreciation Areas Post to General Ledger


                                            Click on Book depreciation area


                                      Select all values allowed in Interest tab


2.2 Depreciation Area Posting

Asset Accounting – Integration with the General Ledger – Post depreciation to the General Ledger – Specify Intervals and Posting Rules


                                                   Select the Company code


                                                    Tick on post interest


2.3 Specify Allowed Depreciation Types for Depreciation Areas- OABZ

 Asset Accounting (Lean Implementation) – Organizational structures – Depreciation Areas – Specify Allowed Depreciation Types for Depreciation Areas


                                                      Tick on interest tab


3. Creation of Asset Master data and Acquisition process


                                         Create Asset (AS01)


                                                              Write description


                                                              Go to Leasing tab


                                    Enter useful life same as mention in agreement


                                                               Open AS03


                                         Click on opening posting and post the document


                                                                Go to FB03


This is the Brief process of Lease Accounting in FI-AA. I hope y’all find the information useful. Your inputs are welcome.




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      Author's profile photo Rekha Chona
      Rekha Chona

      Hi Nishi,


      Really nice blog to understand lease accounting configuration in simple manner. I just wanted to have one question

      Is Opening Posting tab in asset master will only come if real estate licensing is procured?




      Maulik Maniyar

      Author's profile photo Vishal Agarwal
      Vishal Agarwal

      Hi Nishi

      Very accurately written .

      As you mentioned in blog that configurations are same for both operating and capital lease.

      It would be highly appreciated if you can help me out with configuration from lessor's viewpoint under operating lease.



      Author's profile photo Bogdan-George Bucalae
      Bogdan-George Bucalae

      Author's profile photo Nitin Kumar
      Nitin Kumar

      Thanks Nishi for such a nice document...!

      Please share the link for 2nd part as well.

      In the given process, I have a query! Leased asset remains property of the lessor so why are we debiting the Asset in the books of lessee...?



      Nitin Goyal

      Author's profile photo Mubashir Iqbal
      Mubashir Iqbal

      Because you received the Asset form Lessor , now you have to Cr.Liability account with Asset Value & generate repayment schedule to lessor , Once fully payment will be made Dr. Liability -Dr.Bank Account eventually you will be owner of Asset.

      Author's profile photo Gourav Jain
      Gourav Jain

      Hi Nishi,


      This functionality  is  not available  in SAP S/4 . I have checked  on 2020 version, there is no open posting tab.


      Then further  i checked on SAP market place , it is being said  lease accounting  engine is no longer supported.


      Please correct  me if you have seen this worked  in S4 environment.



      Author's profile photo Edgardo Ascanio Regueira
      Edgardo Ascanio Regueira

      this is only for ecc? real state is are activated, is posible?