Configuration of Lease Accounting
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.
- Capital Lease
- 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.
1.1 Create Account Determination
SPRO – Financial Accounting (NEW)- Asset Accounting – Organisation Structure-Asset Classes-Specify Accounting Determination
1.2 Create screen layout
SPRO – Financial Accounting (NEW)- Asset Accounting – Organisation Structure-Asset Classes- create Screen Layout
1.3 Make number range
SPRO- Financial Accounting (NEW)- Asset Accounting – Organisation Structure-Asset Classes-define number range interval (AS08)
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
1.5 Creation of account –FS00
1.6 Integration of account (AO90)
SPRO-Financial Asset-Asset Accounting-integration with GL account- Assign GL Account
1.7 Determine Depreciation Area (OAYZ)
1.8Field status for leasing tab in Asset Master
SPRO-Financial Asset-Asset Accounting-Master data- Screen layout- Define Screen layout for Asset master
2 Activate interest calculation
2.1 Depreciation area
Asset Accounting – Integration with the General Ledger – Define How Depreciation Areas Post to General Ledger
2.2 Depreciation Area Posting
Asset Accounting – Integration with the General Ledger – Post depreciation to the General Ledger – Specify Intervals and Posting Rules
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
3. Creation of Asset Master data and Acquisition process
This is the Brief process of Lease Accounting in FI-AA. I hope y’all find the information useful. Your inputs are welcome.
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?
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.
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...?
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.
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.