FA Lease (General Accounting Question)

mstallmann

A client of ours has leased a machine for the next couple of years. At the end of the two years, they are going to purchase the machine. They want to be able to assign the monthly lease payments to the value of a fixed asset and deppreciate it over the life of the FA. What is the best way to do this in Navision?

Thanks in advance,

Mike

rsfairbanks

IF they want to do this, best way is to create the asset and debit it with the full value, crediting a lease liability g/l (balance sheet) account.

You can then depreciate the asset each period and reduce the lease liability with the lease charges (any interest element can be posted direct to the P&L.

Not sure of full details so cannot comment if in line with US GAAP or IAS

mstallmann

Sounds correct. Thanks,

Mike