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SRuthe
Advisor
Advisor
Recently, I noticed several questions in the SAP Community related to the migration of lease contracts in SAP Business ByDesign. It seems, that this topic lacks some information. Therefore, I want to provide some more information around it with this blog post.

Currently, a migration of lease contracts within the standard Migration of Financial Accounting Data in SAP Business ByDesign is not supported. In general, there are two options how you can take over existing lease contracts during a migration.

Option 1

You can choose Transition Type 1 - Retrospective for your company to calculate the lease contract values at the migration date based on historical information. The relevant activity in the business configuration is called Lease Management Accounting. To set the transition type for a company open Define Transition Type.


To define the migration date, you need to set the Lease Contract Transition Date for the company. Go to work center General Ledger and open the Companies view under Master Data. To set the transition date for a company select the corresponding line and click Actions > Set Lease Contract Transition Date. For more information about maintaining the lease contract transition date at company level, see Companies Quick Guide.


When these settings are done, you can either manually create existing lease contracts or import them by the Migration Tool (Migration Workbench). For more information about using the migration tool for lease contracts, see Configuration: Transition of Lease Contracts section Migrate Data Using the Migration Tool (Migration Workbench).

Note

  • Due to different approaches in the calculation of the present value, interest and depreciation amounts (for example interest usance used) the calculated values in the system may not fit exactly the values in the legacy system.

  • The system will post the opening balances on the transition date.

  • In the current design the retrospective approach will post the right-of-use asset opening balance on the transition date as one value (remaining book value) and will not separate the values of historical acquisition cost and accumulated depreciation to different g/l accounts, see also my comment on 29.03.2022 in my blog post.

  • If you choose this approach, you need to exclude the corresponding g/l account balances from the Migration of Account Balances or create a manual journal entry voucher to reverse the balances. In addition, the corresponding fixed assets of these lease contracts need to be excluded from the Migration of Fixed Assets.


Example

Let’s assume, you want to migrate a lease contract on 31.12.2021 with the following details.

  • Interest: 1,5%

  • Start Date: 01.07.2018

  • Lease Term in Months: 60

  • Transition Type: Retrospective

  • Lease Installment: 10.000 USD

  • Payment Form: In Arrears

  • Recurrence: Monthly

  • Day of month: 31


The screenshots below show how to enter this lease contract in the system.


The following valuation cash flow is generated based on the lease contract details.


On the transition date (migration date) 31.12.2021 the system will post the Opening Balance for the Right-of-Use Asset of 182.598,59 USD as acquisition cost, and 187.631,38 USD as the Opening Balance for the Lease Liability. The difference of 5.032,79 USD will be posted to Retained Earnings.


Option 2

The only other way to handle existing lease contracts is to create manual postings in the system. In this case, you need to create a Fixed Asset for the Right-of-Use Asset, Supplier Invoices and Journal Entry Vouchers manually to reflect such a lease contract on balance sheet.

When using this option, the relevant amounts for all postings must be calculated outside SAP Business ByDesign.

This information shall help you to select the right approach for the migration of lease contracts.
9 Comments
OmarSaad
Participant
0 Kudos
Every time I am making the above steps and make my transition date such as 31-10-2022, and I am uploading a lease contract with a duration starting from 1-1-2022 until 12-1-2024, the system gives me an error which is (Object Item: 1 Condition: Lease Installment - 20220101 invalid condition term; must meet recurrence criteria). This error message is removed when I adjust the duration to be the same or before the lease contract migration date which I set in the company's work center. I have uploaded everything for my go-live except the lease contracts, and now I am unable to upload my contracts. I need to upload them so the contracts can update the balances of the lease GL accounts on the migration date as the trial of the customers, Please I need urgent help.
Thank you so much in advance. 
OmarSaad
Participant
0 Kudos
Hello please any response !!

 
OmarSaad
Participant
0 Kudos
Dear Sisi,

Please can i get a response on my latest comment.
SRuthe
Advisor
Advisor
0 Kudos
Hello,

thanks for your question.

The error message "... invalid condition term; must meet recurrence criteria" appears when the validity start and end date is not a full period (month, quarter or year). Is the payment frequency monthly, quarterly or yearly? When the lease contract duration is starting from 1-1-2022 and has a payment frequency quarterly or yearly the end date must be 12-31-2024 to cover a full quarter or year. In case of a monthly payment frequency it must be 11-30-2024.

In case of any further issues, please create an incident to be able to analyze your use case in detail.

Thanks and best regards,

Sissi
KshamaMehta
Participant
0 Kudos
Hello sissi.ruthe

Thank you for this blog. Indeed it is very useful. I followed the steps and created a lease contract manually. I am getting below errors:

 

Secondary processes are not allowed to create rounding difference rows

Other valuation items related to lease contract 16 cannot be processed

 

I am unable to find any help document related to this. Can you please help us here? Thank you so much in advance.


 

Regards,

Kshama

 


Lease Migration


 

 

 
former_member861793
Discoverer
0 Kudos
Hi Kshama,

Is your issue related to Secondary processes are not allowed to create rounding difference rows and Other valuation items related to lease contract 8 cannot be processed is solved. If yes, Could you please let me know how did you solve this?

Kind Regards,

Hari
KshamaMehta
Participant
0 Kudos
Hi hari_viego

Do not keep the lease contract transition date in the general ledger WC as the last day of the month. Keep it as any other date.

 

Regards,

Kshama
former_member861793
Discoverer
0 Kudos
Hi Again,
But transition date should be the same as migration date right?

Kind Regards,
Hari
almodather
Explorer
0 Kudos

Hello.

I have a question in this case "On the transition date (migration date) 31.12.2021 the system will post the Opening Balance for the Right-of-Use Asset of 182.598,59 USD as acquisition cost, and 187.631,38 USD as the Opening Balance for the Lease Liability. The difference of 5.032,79 USD will be posted to Retained Earnings"

What can we do with the Difference?