This activity is used to enter general information of the lease contract and the lease accounting related information.
All the amounts shown in the contract are in the currency entered in the Currency field. The amounts in Accounting Currency and Parallel Currency are calculated when creating postings based on the prevailing currency rates of the default Currency Rates Type.
Start Date could be equal to the payment due date of the first installment if the agreement is to pay installments in advance (at the beginning of the period). If the installments are agreed to pay in arrears (at the end of the period), start date should be less than the payment due date of the first installment. Ideally the gap of the start date of the contract and the payment due date of the first installment should be equal to the payment interval (frequency) of the periodical lease payments to be made.
End Date could be the payment due date of the last installment if the agreement is to pay installments in arrears (at the end of the period). If the installments are agreed to pay in advance (at the beginning of the period), end date should be greater than the payment due date of the last installment. Ideally the gap of the end date of the contract and the payment due date of the last installment should be equal to the payment interval (frequency) of the periodical lease payments to be made.
In the Accounting Standard list, select the accounting standards applicable for lease accounting which are supported by the IFS. IFS support accounting standards issued by the International Accounting Standards Board -IASB (International Financial Reporting Standards - IFRS (IFRS 16) and the Financial Accounting Standards Board - FASB (United States Generally Accepted Accounting Principles - US GAAP (ASC 842)). Select the appropriate standard for the lease contract. IFRS is set as the default value unless the country of the company is not the United States. (Note: This cannot be changed when the Status is not Preliminary, and/or an Amortization Schedule has been created.)
In the Leasing Type list, select the type of the lease contract; Finance or Operating. If the Accounting Standard is IFRS, Leasing Type Operating is not allowed. Leasing Type decides certain calculations on Amortization Schedule and the postings under Lease Periodical Accounting proposals. (Note: This cannot be changed when the Status is not Preliminary, and/or an Amortization Schedule has been created.)
In order to enter information on the Lease Accounting Contract page, the following must have been completed:
As a result of this activity: