Procurement of Leased Fixed Assets Process

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Thoughts on the best practice of utilizing a purchase requisition to acquire a leased fixed asset.

For example, a leased item is bundled into a monthly leased payment that does not tie to the full purchase price on the purchase order and thus it can't be settled with a purchase order with a corresponding invoice (the leased invoice is put into the invoice journal). Furthermore, if the fixed assets parameters is enabled to "create asset during product receipt or invoice posting" the purchased leased item remains as a Fixed Asset not acquired because the purchase order is never invoiced.

Looking for a best practice process to handle the requisition and acquisition of a leased Fixed Asset without having open purchase orders that are never settled with a like invoice while accounting the for leased items full value as the acquisition price.

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André Arnaud de Cal... 301,075 Super User 2025 Season 2 on at

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Hi Posner,

When using the PO and a link to your asset, AX assumes the value will be aqcuired. In this case you are leasing the asset, so I assume it is not your property and the value of the Asset should not be acquired?

Can you tell me if these assumptions are correct?

What is needed for the Asset value. Should it remain at zero? Do you want to have a recurring purchase order for the lease periods? Please explain your process.

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Hi Andre,

Thank you for replying. The process here is that the customer (my client) makes the purchase order to the vendor, but the customer's bank/financer will end up paying the vendor directly utilizing a capital lease program in which the customer ends up owning the equipment at the end of the lease. Outside the system the customer and the bank make a payment schedule on purchases/items deemed of utilizing the capital lease program. For now we are just going to take the automatic FA creation off the PO for procurement categories related to these purchases. That being said, what best process should be suggested to invoice and settle a PO that will end up being paid and settled by a 3rd party such as the bank?

Ryan

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André Arnaud de Cal... 301,075 Super User 2025 Season 2 on at

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Hi Ryan,

Will the invoice for these assets be sent to the customer or the bank/financer? What amounts are required to be posted in the ledger? Is the PO only for issuing the order? Can you indicate the required ledger entries?

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Ethan Ong on at

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Hi,

May sounds amateur, but I try to set in a simple scenario buying a Mercedes Benz under Hire Purchase/Leasing agreement with XYZ Bank Ltd.

Issue Purchase order to Purchase Invoice for Mercedes Benz for the purchase price US20K where it could be broken down of 10K under financing by XYZ Bank and 10K down payment (use prepayment to apply).

Next transfer the amount 10K through General Ledger to XYZ Bank to settle against Mercedez Benz. Use the open balance to settle against the open Invoice.

Create Invoice Journal or to be consistent use General Ledger to accrued all periodic interest in XYZ Bank.

All corresponding can be done use Vendor Payment to settle against the outstanding with XYZ Bank.

Hope this helps.

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