Before You Begin

This 10-minute OBE shows you how to define the fixed asset default coding and depreciation method for the company, object, and subsidiary combination for the right of use asset account. Assets that are processed using lessee accounting must have the Ledger Type set to AA and the Depreciation Method set to 00 (No Depreciation Method Used) as they will be amortized instead of depreciated.

Background

Many businesses lease office space and equipment from different suppliers. According to the new lease accounting standards, businesses must account for these leases and the leased asset on them on their balance sheets. The Lease Accounting functionality in JD Edwards provides the ability to comply with these standards.

Scenario Guidelines

In this series of OBEs, you will learn how to set up the system and perform the required actions for following lease scenario:

• You are leasing a copier from Electronics R Us.
• The lease is for two years and you expect to return the copier at the end of the lease.
• You will pay $2,500 quarterly in advance.
• You have to pay an up-front installation charge of $1,000 to secure the lease.
• At the beginning of the second quarter, you renegotiate the price of this lease based on an agreement to lease other equipment from the vendor and they agree to a price break on the existing lease. Your new quarterly payment will be $2,250 starting from the second quarter.
• At the end of the second quarter, the copier breaks down and the cost of repairs is greater than the replacement cost, so you negotiate with the vendor to terminate this lease and create a new one for a newer copier model.

What Do You Need?

You must have completed the following tasks:

• Set up Accounts and AAIs
• Ensured that Depreciation Method 00 is available in your data as delivered by JD Edwards

Setting Up Accounting Information—Fixed Asset Default Coding and Depreciation Method

1. Navigate to EnterpriseOne Menus, Financials (G1), Lessee Accounting (G15202), System Setup (G1520240), Fixed Asset Setup (G1520242), Depreciation Default Coding (P12002).
2. On Work the With Depreciation Defaults form, click Add to add a new depreciation default.
3. On the Depreciation Default Coding form, complete these fields in the header:
• Company Number: 00150
• Asset Code Obj: 2080
• Accumulated Depreciation: 150.2180

Leave all the other fields blank.

4. Complete these columns in the grid

L T (Ledger Type)	Depr Meth	life Mos	Depr Info	Meth Comp	Meth%	Meth 9 Sch No
AA	00	Blank	Blank	C (Current Year to Date)	Blank	Blank

5. Click OK to save the entries.

Your depreciation default coding and depreciation method should look like this.