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Dynamics 365 Community / Forums / Finance | Project Operations, Human Resources, ... / Asset Leasing. Why is...
Finance | Project Operations, Human Resources, ...
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Asset Leasing. Why is the Operating lease not generating a straight-line depreciation?

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Posted on by CU23091914-1
Hi All, 
I have an operating lease. In the ASC842 book, it did not generate straight-line depreciation (see screenshots 1 and 2). However, in the IFRS16 book, it did generate straight-line depreciation and defaulted to a Finance lease type (see screenshots 3 and 4). Does anyone know what caused the different in depreciations? I noticed that when I created the lease, the asset list page defaulted to "Automatic." 
Thanks so much!
 
 
 
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  • Suggested answer
    Bill Ngo Profile Picture
    Bill Ngo 374 on at
    Hi,
     
    In your case, the different in depreciations is caused by the different Lease types configurating for your books. 
     
    The ASC842 is setting up Lease type as Operating, meanwhile IFRS16 book is the Finance. 
     
    That is why system calculated depreciation expense for your Lease Id (Truck 3) by IFRS16 book as straight-line. Meanwhile calculated depreciation expense by ASC842 book according to the payment schedule.
     
    Rgds,
    Bill

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