NetSuite Now Has Lease Accounting in Fixed Asset Module
The Lease Accounting feature is introduced in the NetSuite Fixed Assets Management SuiteApp to comply with the IFRS 16 and ASC 842 standards for lease. This standard requires lessees to recognize nearly all leases and transfer all operating leases to the balance sheet starting on January 1, 2019.
The Lease record lets you:
• propose a lease asset,
• define the terms of the lease,
• add lease payments,
• and create the lease amortization schedule.
When a lease journal has been generated, a link to the journal entry will be available in the record page.
Adding Lease Payments
You can add your lease payments through the Lease Amortization Schedule subtab or through CSV import. From the Lease Amortization subtab, you can enter lease payments one at a time on the Payment sublist. You can also enter up to 120 payments at once using the Generate Payments button.
Generating the Lease Amortization Schedule
The Lease Amortization Schedule is the schedule of the net present value and interest for the lease. You can generate a lease amortization schedule if you have previously entered lease payments for the Lease record. The status of the Lease record should show Pending Lease Schedules if there are no schedules created yet.
Creating Lease Journal Entries
When the interest schedules for the lease record have been generated, the Create Lease Journal button will be visible on the Lease record. This button will only be available if no journal entry has been created for the lease record.
This process will debit to the Right-of-use asset and credit to the Lease Liability. The generated lease journal will be used to propose and create a leased asset. The leased asset will also go through the whole asset life cycle.
The journal entry will be created and a link to the journal entry will be available in the Journal field on the Lease record.
Recording Lease Interest
The Record Lease Interest page lets you recognize the interest amount per period. The interest amount is taken from the lease amortization schedule of the lease record. A link to the associated Lease record will be available in the Interest journal.
Asset Proposal and Generation
If an asset is generated from a lease record, the Asset is Leased box on the asset record will automatically be checked. The Lease subtab on the Asset Record will contain information about the lease, and a link to the lease record.
The lease information from the lease record will be carried over to the Lease tab of the asset record.
Migrating Existing Lease Details
With the introduction of the Lease Accounting feature, the existing lease details in the asset record (Lease subtab > Deprecated subtab) will no longer be used. The lease details of all newly created lease assets will be available in the Lease subtab under the Lease subtab. You can migrate lease details to create a Lease record for the existing lease assets.
Modifying Lease Records
Modifying lease records allows you to make changes to the original terms and conditions of the lease. The Modify Lease Record button will be available on Lease records with associated assets if the Asset Lifetime is equal to the Lease Term and the Depreciation Period is equal to the Rental Frequency.
A Lease Contract record will be generated every time you create a new lease or modify an existing lease. The Lease Contract record contains the lease details and links to the Lease record and the Journal.
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