Lease-out process in IFRS16

[Former Member]

Hi Team,

I would like to know SAP standard process for lease-out in IFRS16, if any.

please let me know

Thanks and Regards,

Ram

[Former Member · Accepted solution]

Hi Hitesh,

Thank you for your reply. do we have SAP standard process for lease-out in IFRS 16.

Please let me know the SAP notes related to lease-out in IFRS16.

Thanks

Ram

[former_member441136]

Hi Ram,

Whatever I explained, is the Standard process for Lease Out.

Rule is FINANCELET, as I have mentioned already.

Please check Note No. 2255555 for IFRS16 Solution.

Looking like, you have marked, your reply as the 'Best Answer', could you please correct it.

Regards,

Hitesh

[former_member441136]

Hi,

Standard Valuation rule given by SAP is "FINANCELET".

Accounting will be:

1.Lease Receivable:

Lease Receivable Debit (PV of Lease Payment)

Sublet Revenue Credit

2. Lease installment receiving:

Lease Clearing Debit (with Periodic Payment amount)

Lease Receivable Credit

3. Interest booking:

Lease Receivable Debit (Monthly Interest)

Lease Interest Credit

At the end of lease, Lease Receivable will be nullifeid.

Hope that was the answer of your query.

Regards,

Hitesh

[former_member581851]

For lease out or receivable leases, what's applicable for IFRS16 is the straight-lining method. This means that total contract cash flow is spread over the lease term equally.

In terms of process, the following new steps will have to be applied:

1. assignment of valuation parameters

2. valuation run

3. valuation posting (monthly)