Transferring Lease Liability and ROU Assets

To transfer the lease liability, the application uses the month-end ST and LT total liability closing balance as of the effective date, and converts them to company and group currency amounts. The application then generates the following postings in each accounting standard configured:

  • Derecognize the ST and LT liability from company A:
    • Debit entries in ST and LT liability accounts.
    • Credit entry in the Intercompany payable/receivable account.
  • Recognize the same ST and LT liability amount in company B:
    • Debit entry in the Intercompany payable/receivable account.
    • Credit entries in the ST and LT liability accounts.

To transfer the ROU asset, the application uses the difference between the closing GBV and AD amounts as of the effective date, and generates the following postings in each accounting standard configured:

  • Derecognize the ROU asset in company A: 
    • Debit entry in the Accumulated amortization account.
    • Debit entry in Accumulated Impairment account (if an impairment was previously recorded).
    • Credit entry in the ROU Asset account.
    • Debit entry in the Intercompany payable/receivable account.
  • Recognize the ROU asset in company B:
    • Debit entry in the ROU Asset account.
    • Credit entry in the Accumulated amortization account.
    • Credit entry in Accumulated Impairment account (if an impairment was previously recorded).
    • Credit entry in the Intercompany payable/receivable account.

See also:  

Nakisa Lease Administration 2022.R2-SP © 2023

 

 

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