Dynamics Community Forum Thread Details

I have an issue related to asset leasing module.

Issue tested on - v10.0.40 and 10.0.41 in USMF entities.

As per the issue, some lease summaries don't post the termination journal when the lease is terminated, while some do. The standard expectation is that all lease summaries should post the termination journals once a lease is terminated.

Upon closer investigation, I observed that if we create a lease summary and create the journals for payments, liability and depreciations, and then finally terminate the lease, the system DOES NOT POST the termination journal. But if we create a lease and only create liability and depreciation journals, while ignoring the payment journals, the system POSTS the termination journal. This is important, because the termination journal knocks of the GL accounts for Use of Asset, Accumulated Dep and Lease Liability. If it does not get posted, those accounts remain open.

Repro steps -

Case 1 - Terminate a lease without posting payment journals, only post liability and asset depreciation journals

Create a lease summary
Enter any value for fair value, useful life, borrowing rate, lease start date.
Create the payment schedule lines for an amount and period (I set 5 months with payments of 20,000 each)
Create schedules, confirm payment schedule, create initial recognition journal and post it
Create batch schedules for posting liability amortizations and asset deprec journals.
Now submit the lease for termination proposal and terminate it.
In the lease summary -> books -> liability transactions, the termination journal will be posted as shown below -

Case 2 - Terminate the lease after creating journals for payments, liabilities and deprecs.

Repeat the same steps as above till step 4.
From step 5, create the batch for payments, liabilities and asset deprecs.
Now terminate the lease.
In the liability transactions, the termination journal wont be posted.

I checked the Trial balance in both cases, and noticed the following -

Trial Balance after case 1 -

In this case, the first 3 accounts are knocked off while the Gain/loss account is hit.

Trial balance after case 2 -

here, the accounts are not knocked off as they should have been had the termination journal been posted. Instead it hits a new GL account for Notes Payable.

Now my concern - It seems obvious that the Notes Payable account will be used to settle the Gain/Loss, Accumuated Deprec and Right of Use accounts. But how will the user do it? They cant post a manual entry for this.

Expectations - I wish to know how the accounts for Acc Dep, gain/loss, right of use are settled when the termination journal is not posted.

Thank you.