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Dynamics 365 Community / Forums / Finance | Project Operations, Human Resources, ... / what is the difference...
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what is the difference between Short term threshold (Months) and Low value threshold in Asset lease

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Posted on by Community member 2
Hi Team,
 
Can you please provide more information why Short term threshold (Months) and Low value threshold in Asset lease and why it is used in IFRS16 
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    Community member Profile Picture
    Community member 2 on at
    what is the difference between Short term threshold (Months) and Low value threshold in Asset lease
     
    Can you clarify if you are using Dynamics AX or Dynamics 365? I'm asking this question as you posted in the Dynamics AX forum where Asset lease functionality was added to the standard product in Dynamics 365 Finance.
     
    I am using in Microsoft dynamics 365
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    Hana Xue Profile Picture
    Hana Xue Microsoft Employee on at
    what is the difference between Short term threshold (Months) and Low value threshold in Asset lease
    Hi,
    In D365 FO, the explanation of these two parameters is as follows:
    Short-term threshold:  enter the number of months to use as a threshold for short-term leases. If the lease term is less than or equal to the number of months that you enter here, the lease will be classified as a short-term lease, and the deferred rent treatment will be applied.
    Low value threshold:  Enter an amount to use as a threshold for low-value leases. If the fair value of the asset is less than or equal or the value that you enter here, the lease will be classified as a low-value lease, and the deferred rent treatment will be applied.
    By incorporating these thresholds into D365 FO, organizations can ensure compliance with IFRS 16 while streamlining their lease accounting processes. For more details, you can view the following links:
    How to Set Up Asset Leasing in Dynamics 365 Finance & Operations - Encore Business Solutions
    Set up lease books - Finance | Dynamics 365 | Microsoft Learn
    Best Regards,
    Hana
     
  • André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 291,240 Super User 2024 Season 2 on at
    what is the difference between Short term threshold (Months) and Low value threshold in Asset lease
    Hi,
     
    Can you clarify if you are using Dynamics AX or Dynamics 365? I'm asking this question as you posted in the Dynamics AX forum where Asset lease functionality was added to the standard product in Dynamics 365 Finance.

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