There are two aspects:
One is the physical tracking, the other is the financial charge.
Financial lease is the easiest part.. The asset is yours and stays in your company and is depreciated there.
For the invoice use a service line to ship/invoice. UOM presumably is days/hours and chargerate is daily/hourly hire and qty is the number of days /hours. You can also set up an agreement with call off orders.
For the physical side. The simplest option is just to update the FA location but that is a manual process for which you could use a Case.
A workaround for more control is to create a zero value, virtual item called 'asset' (a variant id or batch number can hold a specific asset id) add it to your stock in a virtual warehouse/location called 'my assets'. I suggest as a standard cost, zero value item. When the sale is done transfer the item to a location in your warehouse and use the other company's id as the location id. Optionally also write some code to update that new location id to the assert location in the FA or to trigger an alert for someone to do it manually.
( You could sell and ship the virtual item, and have it retuned, but as its your physical asset to audit and to count I would prefer to track its location in my own system. You could use a batch for shelf life etc to track the expected end of lease.)
The receiving company has to decide how to track it - and how to treat it as a leased asset it to comply with ifrs/gaap/iasb. I assume it will be charged against a project wbs line.
A lease agreement is a contract between two parties, the lessor and the lessee. The lessor is the legal owner of the asset, the lessee obtains the right to use the asset in return for rental payments. Historically, assets that were used but not owned were not shown on the statement of financial position and therefore any associated liability was also left out of the statement – this was known as ‘off balance sheet’ finance and was a way that companies were able to keep their liabilities low, thus arguably distorting gearing and other key financial ratios. In reality a company often effectively ‘owns’ these assets and ‘owe a liability’.
The IASB framework states that an asset is ‘a resource controlled by an entity as a result of past events and from which future economic benefits are expected to flow to the entity’ and a liability is ‘a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits’. These definitions form the platform for IAS 17, Leases. IAS 17 recognizes two types of lease: a finance lease and an operating lease.
Finance lease
A finance lease transfers substantially all the risks and rewards incidental to ownership of an asset to the lessee.
Operating lease
An operating lease is any lease other than a finance lease.
Classification of a lease
Consider whether the risks and rewards associated with owning the asset are with the lessee, or with the lessor. If the risks and rewards lie with the lessee then it is a finance lease, if the lessee does not take on the risks and rewards, then the lease is an operating lease
There are new standards (IFRS16) coming into force January 2019.
