Asset Value Extension in Lease Accounting

[sentinal0402]

Dear All,

     I am facing a scenario where some amount addition is required in one lease asset created by transaction RECN. The issue here is 2 months of depriciation has already been run on the lease asset and transfer of amount needs to be done from WIP asset to this lease asset. I am simply unsure whether simple asset to asset transfer will work or we adjust the WIP asset through JV and just add a new line item of extra value in lease contract itself. A quick help is appriciated.

Regards,

Chandan Barai

[brahms86]

Hello Chandan Barai,

if you want to activate an amount on a lease asset, which is managed by a RE-FX contract, I would not recommend to post directly to such an asset, as typically the depreciation on this asset is managed by the valuation rule of that asset.

If you are not that person, you need to involve someone who knows how to handle and configure RE-FX contracts.

You need to take away those activated expenses again from the WIP asset. From the P&L you post to an interim BS account from where the RE-FX contract picks it up.

The problem is, that the amount in question must be part of the cash flow of the contract. That means, you need to maintain a (one-time ?) condition of this RE-FX contract which is relevant for the valuation rule in question, so that it will update your valuation and hence the leasing asset.