About Lease End and Closing

Once all documents have been posted (both internally and externally, by default) under all valid accounting standards for an activation group, you can trigger the lease end process. The Activation Group Status changes from "Active" to "Lease End".

The asset retirement documents (Asset Termination and Liability Termination journals) retire the outstanding gross book value of the asset (indicated in the Asset Transition Schedule) in all available currencies. The application also addresses differences in all of the posted journals caused by rounding performed for different currencies by creating a currency rounding adjustment expense in the Currency Rounding Adjustment journal.

The application also verifies if there are any outstanding balances in the following account types when the activation group is closed: ROU Asset, LT Liability, ST Liability, and Accrued Interest. If the balances are not 0, the application generates closed ledger journal entries where the outstanding balances are cleared out. To verify the lease end account balances (per unit and per accounting standard) while the activation group is active, click the Context Menu > Lease End Account Balances.

Note: Short term and low value leases do not have termination journals.

Closing the activation group changes the Activation Group Status to "Closed" and posts the asset retirement documents. The unit statuses are updated as follows:

The status changes to "Casualty" if there was a casualty event entered for the activation group.
The status changes to "Purchased" if there was a Purchase Option term exercised.
Otherwise, the status changes to "Returned".

You can then close the lease component and contract (if it does not have any other open lease components) manually, or chose to have them closed automatically once all the child objects are closed. The Lease Component Status and Contract Status both change to "Closed".

To close the activation group:

Open the required activation group.
If all documents have been posted in all accounting standards, you can click Lease End. The Activation Group Status changes to "Lease End".
Click Close.
The Closed Ledger pop-up displays any outstanding balances per unit and accounting standard. By default, the Posting Date and Document Date are set to the current date, but you can change them if required. Note that the selected date applies for the termination journals of all the units.
If you want to automatically close the lease component, contract, and master agreement (if there are no other open child objects), select Auto-Close Parent Objects.
Click Submit. The Activation Group Status changes to "Closed" and the asset retirement documents, currency rounding, and closed ledger are posted in all valid currencies. If required, click Cancel during the closing process to return the activation group to "Lease End" status.

To close the lease component and contract:

Open the lease component that the closed activation group belongs to.
Click Close. The application asks if you would like it to auto-close the parent contract and master agreement, if there are no other open child objects.
Open the contract that the lease component belongs to.
Click Close. The application asks if you would like it to auto-close the parent master agreement, if there are no other open child objects.