Leased asset initial recognition: multiple subledger transactions in same voucher

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Posted on by CapsLock

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Hi,

When creating a journal for leased assets initial recognition (journal automatically created by the system) it places on the same voucher the fixed asset account and the vendor account. This leads to this error:

I know this can be solved by activating this parameter:

But it is not recommended to do so:

Therefore, what is the best workaround in this case?

Thanks!

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Hi CapsLock,

One potential workaround is to disable the "Pay to vendor" parameter on the lease book setup while posting the initial recognition journal entries. This parameter will not only post lease payments to the vendor but will also post additional right-of-use asset considerations - initial direct costs, lease prepayments, dismantling costs, and lease incentives - to the vendor upon initial recognition.

If this parameter is disabled, those amounts will be offset against the "Lease payment" posting type account.

For example, I have two books, one with the Pay to Vendor enabled (ASC 842) and one with the parameter disabled (IFRS 16):

ASC 842:

IFRS 16:

When posting the initial recognition journal entries for a lease that has right-of-use asset considerations, the ASC 842 book will throw an error:

However, my IFRS 16 book separates these additional items and post the a ledger account allowing me to post the initial recognition:

For reference the Lease Payment posting type:

Thanks!

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