EOS Docs – EX106 IFRS16 Lease Contract Management (LCM)

Docs: Leasing Setup (LCM)

Mon, 01 Jan 0001 00:00:00 +0000

Setup (LCM)

Before managing leasing contracts, the module must be configured once, defining the posting journals to be used. This page describes the general setup.

Leasing Setup (LCM) collects the general settings valid for the whole company: the depreciation book to be used for the Right of Use fixed assets, the optional number series for the good code, and the general journals used for the IFRS16 entries and for the periodic interest/debt reduction entries.

Prerequisites

Before starting the configuration, verify that the following already exist in Business Central:

the number series to be used for internal contracts, for good codes and for Right of Use fixed assets;
a depreciation book dedicated to Right of Use fixed assets;
the chart of accounts, including the accounts to be used for debt, interest and the transitory account;
the fixed asset classes and subclasses to be assigned to the Right of Use assets;
the general journal templates and batches to be used for the leasing postings;
the vendor cards of the leasing companies.

Configuration

Search for Leasing Setup (LCM) and fill in the following fields:

Field	Description
Fixed Asset Depreciation Book Code	Depreciation book used for all Right of Use fixed assets created by the module
Good Code No.	Optional number series for automatically assigning the code of leased goods
Detection over IFRS16 Journ. Templ. Name / Detection IFRS16 Batch Name	General journal template and batch used to post the IFRS16 initial recognition entry
Detection Leasing Journ. Templ. Name / Detection Leasing Batch Name	General journal template and batch used to post the periodic interest detection and debt reduction entries

If the setup record does not exist yet, it is created automatically the first time the page is opened.

SGL Integration

If the EOS Accruals and Simulated General Ledger (SGL) module is also installed in the environment, the SGL Integration section appears on the Leasing Setup (LCM) page, with the fields:

Field	Description
Enable inheritance from Contract Line to SGL Journal Lines	If enabled, accrual data is automatically copied from the contract line to the document line when retrieving installments in a purchase invoice
Leasing Accrual Template	Default accrual template proposed for the interest entries

Docs: Leasing Contract Types

Mon, 01 Jan 0001 00:00:00 +0000

Leasing Contract Types

Every leasing contract must be linked to a contract type: the G/L accounts used in the postings and the number series used to assign the internal numbers are derived from this link.

Leasing Contract Types represent the contract categories managed (for example real estate leasing, vehicle leasing, equipment leasing), each with its own G/L accounts, number series and fixed asset classification.

Configuration

Search for Leasing Contract Types and create a new type for each leasing category managed, filling in:

Contract Type Code and Description of the contract type;
Internal Leasing Contract No. Series: number series for the internal numbers of contracts of this type;
the five G/L accounts: Debt Leasing Account No., Detection IFRS16 Debt Account No., Initial Costs Account No., Interests Account No., Transitory Debt Account No.;
Leasing Class Code and Leasing Subclass Code to be assigned to the Right of Use assets created for this contract type;
Right of Use Series No.: number series for assigning numbers to Right of Use fixed assets.

The module is ready to be used when at least one contract type exists with its own accounts and number series, to be used when creating contracts.

It is recommended to create a separate contract type for each leasing category (real estate, vehicles, equipment), so that different G/L accounts and fixed asset classifications can be used for each category.

Docs: Leasing Goods

Mon, 01 Jan 0001 00:00:00 +0000

Leasing Goods

Every physical asset subject to a leasing contract (a vehicle, a building, a piece of equipment) must be recorded in the Leasing Goods master data before it can be linked to a contract.

The leasing good card collects the basic information required to calculate the depreciation schedule and to create the Right of Use fixed asset: description, monetary value, any initial direct costs, and, once created, the link to the generated fixed asset.

A good can be assigned to only one contract at a time and cannot be deleted while it is still linked to a contract.

Configuration

No specific configuration is required beyond the general module Setup. If a number series has been defined for the good code in the Setup, the code can be assigned automatically; otherwise it must be entered manually.

Usage

Search for Leasing Goods (LCM) and click New.
Enter the Good Code (manually, or leave it blank to have it assigned automatically from the number series configured in the Setup).
Enter the Description of the good: it is automatically copied to the description of the Right of Use fixed asset.
Enter the Good Value: this amount determines the share of each installment allocated to the good when a contract includes multiple goods. If the value is left at zero and the good is the only one in the contract, it is treated as 100% of the total.
If there are initial direct costs related to the signing of the contract (e.g. activation fees), enter them in the Initial Costs field: they will be added to the value of the Right of Use fixed asset during the IFRS16 detection.

Once the entry of the record is complete the good is available to be assigned to a leasing contract through the Assign Goods action on the leasing contract card