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Configuration of Lease Accounting

Hello Readers,

Greetings!!

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.

Steps

                                                              Steps

 

 

1. Configuration

1.1 Create Account Determination

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

Account%20determination%20of%20Lease%20account

                                        Account determination of Lease account

1.2 Create screen layout

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

Screen%20layout%20for%20Lease%20account

                                                        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%20range%20for%20Lease%20asset

                                                                     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%20detail%20as%20mention%20in%20screenshot

                                               enter detail as mention in screenshot

 

1.5 Creation of account –FS00

Create%20GL%20accounts

                                                            Create GL accounts

1.6 Integration of account (AO90)

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

 

Assign%20the%20GL%20accounts

                                                              Assign the GL accounts

Enter%20GL%20accounts%20for%20depreciation

                                           Enter GL accounts for depreciation

Enter%20account%20for%20interest%20paid

                                           Enter account for interest paid

 

1.7 Determine Depreciation Area (OAYZ)

 Maintain%20depreciation%20area

                                                           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%20Lease%20asset%20Screen%20layout

 

 

 

 

 

 

 

 

 

 

 

 

                          Choose Lease asset Screen layout

Click%20on%20Leasing%20field

                                                Click on Leasing field

Select%20optional%20for%20all%20field

                                                 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%20on%20Book%20depreciation%20area

                                            Click on Book depreciation area

Select%20all%20values%20allowed%20in%20Interest%20tab

                                      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%20the%20Company%20code

                                                   Select the Company code

Tick%20on%20post%20interest

                                                    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%20on%20interest%20tab

                                                      Tick on interest tab

 

3. Creation of Asset Master data and Acquisition process

Choose%20asset%20class

                                         Create Asset (AS01)

Write%20description

                                                              Write description

Go%20to%20Leasing%20tab

                                                              Go to Leasing tab

Enter%20useful%20life%20same%20as%20mention%20in%20agreement

                                    Enter useful life same as mention in agreement

Open%20AS03

                                                               Open AS03

Click%20on%20opening%20posting%20and%20post%20the%20document

                                         Click on opening posting and post the document

Go%20to%20FB03

                                                                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.

 

Regards

 

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