Understanding Balance Sheet Lessee Accounting
Current accounting standards for the lessees of property and non-property assets require that certain types of long term leased assets be accounted for on the company's balance sheet. These leased assets must be included on the balance sheet, and organizations must recognize the assets and the liabilities associated with the lease. These assets are called Right of Use (ROU) assets.
To accommodate these accounting standards, the JD Edwards EnterpriseOne Real Estate Management system includes features that enable users to:
Set up default lessee accounting values in the Real Estate Management constants. You can also use the constants to activate balance sheet lessee accounting once setup is complete.
Set up AAIs for balance sheet lessee accounting.
Set up lessee accounting information for bill codes to define their impact on lease liability and ROU asset calculations. You can then define recurring or manual billing information for the lease using these bill codes.
Manually or automatically create asset records for property units that will be included on a lessee lease.
Create asset records in the Fixed Asset system or during lease entry for non-property assets.
Create a lessee lease that includes property and non-property assets. Each leased asset on the lease references an asset in the Fixed Assets system.
Define lessee accounting information for the lease and the individual assets on the lease.
Process lease commencement activities, which includes:
Creating lease liability and ROU asset amortization schedules for leased assets.
The schedules are used when creating lease commencement journal entries, and during each calendar month to calculate lease liability and ROU asset journal entries. The values in the schedules are based on the lease term, borrowing rate, and the manual and recurring billing information.
Generating the appropriate lease commencement journal entries for the leased assets when the lease begins.
You can then review, approve, and post the journal entries.
Process monthly lessee accounting calculations to adjust the lease liability and ROU asset accounts associated with the leased assets.
You can then review, approve, and post the journal entries.
Easily identify when monthly accounting entries are overdue for processing.
Process early terminations of leases.
Process lease remeasurements when lease terms change.
Process right of use asset revaluation when there is a material change to a currency exchange rate that needs to be reflected in the Right of Use Asset account.
Create an alternate set of schedules to generate journal entries in an alternate ledger to accommodate multiple-entity reporting for a single asset.
Lease Simplification for Lessee Accounting
Numerous user defined objects (UDOs) have been created to help simplify lease entry and maintenance for lessee leases. These UDOs include:
Grid formats
Form layouts
Personal forms
CafeOne layouts
UX One roles and pages
Notifications
For additional information, see Delivered User Defined Objects for Real Estate Management (Release 9.2 Update) and these topics in the JD Edwards EnterpriseOne Applications UX One Roles Implementation Guide:
See "Understanding the Lessee Accounting Manager Role"in the JD Edwards EnterpriseOne UX One Roles User Guide
See "Understanding the Lease Administrator UX One Role"in the JD Edwards EnterpriseOne UX One Roles User Guide
Additional Resources for Lessee Accounting
Lease Management page on
LearnJDE.com, where you can view additional information such
as quick tours, video tutorials, and FAQ documents to assist you with the balance
sheet lessee accounting features.