Leasing Processing in fico

Purpose

Leasing processing is used to administrate and monitor leased assets from the perspective of the lessee.

In comparison to acquired assets, leased assets require the lessee to pay particular attention to accounting requirements. This is because during the leasing period these assets remain the legal property of the lessor or manufacturer.

Depending on the legal terms, the leased assets can be capitalized and depreciated (capital lease method) or they can flow into the P&L as periodic rental expenses (operating lease method). For the purposes of consolidated group accounting, you can record the complex fixed asset under book depreciation per trade law using the Operating Lease Method and in the group depreciation area with Capital Lease Method (Mixed Method). We describe all of these possibilities in this process.

You can find more information about this process under .

You can find the data for this process under .

Process Flow

The Capital Lease Method

1. You first
Create an Asset for the Capital Lease Method, for which book depreciation, costing and group depreciation areas are active.
2. You then
Enter the Opening Entry for your asset, thus capitalizing the present value of the future lease installment payments as the acquisition value.
3. To analyze the posting on your asset, you can
Display the Asset in the Asset Explorer. You should note the document number of the financial accounting document.
4. To display the payables to the vendor, as well as the corresponding payment installments on the due dates, you
Display the Vendor.

The Mixed Method

1. 
   
You first Create an Asset for the Mixed Method, for which only the group areas are active.
2. You then
Enter the Opening Entry for your asset. The present value of the future lease installment payments is posted only in the group areas.
3. To analyze the posting on your asset, you can
Display the Asset in the Asset Explorer. The system does not generate a financial accounting document, as this posting is only relevant for asset accounting.
4. You post the payables to the vendor and corresponding payment installments manually in financial accounting. This is best achieved by creating a recurring entry document. (We do not demonstrate this here.)

The Operating Lease Method

1. You first
Create an Asset for the Operating Lease Method, for which no depreciation areas are active.
2. You then
Display the Leasing Liabilities.