Asset Leasing Basic Configuration in Dynamics 365 Finance & Operation Part 2

Basic Configuration

Below is the few mandatory setup required to record the lease transaction. Apart from these, there are additional setup required as business requirement. 

1. Asset Leasing Parameter

1A. Journal Name setup

Below are the journal name where different types of lease transaction will be booked

1B. Lease Posting Profile / Lease account setup

Note: Leases under IFRS 16 are classified as finance leases whether you choose Operating as a lease type in the lease Book. So with this reason Operating Lease main account must be defined it is mandatory field

2. Lease Books

Lease books contain the accounting policies that determine how a lease is accounted for

Note: Leases under IFRS 16 are classified as finance leases whether you choose Operating as a lease type. So with this reason Operating Lease main account must be defined it is mandatory field

3. Lease Group

Lease groups are required to create new leases. Lease books are associated with each lease group

4. Expense Type

Costs that aren't represented by the payment schedule are known as expense costs. Examples of these costs include property taxes, common area maintenance costs, and insurance expenses.

Note: Here in Asset leasing taxes are not taken care separately so this feature is used to account those costs.

4A. Create new Expense Type

4B. Assign Account to Expense type

Finance / operating lease main accounts will be debited when expense schedule entries are posted. The offset account is specified on the Executory costs payment schedule lines on each lease.

4BA. where to assign offset account

The offset account is specified on the Executory costs payment schedule lines on each lease.

Thank You 

Happy Learning