Lease Assets Management

Deepak H 20 posts since May 31, 2007

Lease Assets Management Nov 6, 2007 1:02 PM
Hi Gurus,
Thanks in advance
I need Lease Assets Management in SAP configuration documents.
If any body have please send me on following mail ID : deepakhattarki@gmail.com
Thanks

Bejugama Sri Dasharathi 200 posts since Oct 24, 2007

Re: Lease Assets Management Nov 7, 2007 6:50 AM
Hi deepika.... the following notes may useful to u ..
The "Leased Assets" scenario describes the management of leased assets from the standpoint of the lessee.
Leased assets create special accounting requirements for the lessee, as compared to assets that an enterprise
purchases or produces itself. During the term of the lease, leased assets remain the property of the lessor or
manufacturer. They represent, therefore, a special form of rented asset. Such assets are legally and from a tax
perspective the responsibility of the lessor, and are not relevant for assessing the value of the asset portfolio of
the lessee. However, in certain countries, you are nonetheless required to capitalize leased assets, depending
on the type of financing.
This scenario makes it possible to handle different types of leased assets differently. Depending on legal
restrictions, you can capitalize and depreciate leased assets (capital lease) or post their rent expense
periodically to the profit and loss statement (operating lease).
There are different ways of handling the values of leased assets in the system. Depending on legal
requirements and the conditions of the lease, there are two different options:
You have to capitalize and depreciate certain leased assets (capital lease).
You treat others as periodic rent expense, which flows into the profit and loss statement (operating lease).
This second type is not relevant to the fixed assets of the lessee. It is therefore sufficient to do one of the
following:

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Manage operating leases as statistical assets in the Asset Accounting component (with no active depreciation
areas)
Manage them only as cost-accounting values (or for group accounting) in the corresponding depreciation areas
There is a special report on rent liability that can be used for all types of leased assets (see below).
You can also manage insurance values for purely statistical leased assets (without depreciation areas). You
enter a manual insurance value and an index series for the leased assets in the asset master record. You
obtain reports on these values using the standard report for insurance values.
<b>Capital Lease Method</b>
Leased assets can be capitalized in the Asset Accounting component using the capital lease method. The
system calculates the acquisition value from the present value of the future lease payments in the leasing
agreement. To be able to determine the future burden of payment, you need to maintain the following leasing
conditions in the asset master records:
Amount of lease payment
Number of payments
Payment cycle
In order to calculate present value, also enter an interest rate. The system requires that you post a leasing
partner as a vendor in the asset master record at the time of the acquisition posting (opening posting).
<b>Periodic Posting</b>
The depreciation posting program posts the depreciation of leased assets and the write-off of the interest.
You can use any depreciation key. The standard R/3 System includes a special depreciation key, in which the
depreciation amounts correspond to the present value of the periodic leasing payments (LEAS). Using this key,
interest is determined as the difference between the leasing payments and the present value.
<b>Calculation of Present Value</b>
The present value of the leased asset is calculated on the basis of the following specifications:
g : Amount of lease payment
i : Annual interest rate
n : Number of lease payments
r: Leasing cycle (for example, 3 = quarterly, 6 = semiannual)
m : Number of periods in a year

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q : Period interest factor = 1 + ( i / 100 * r / m)

If payment is made at the beginning of the period, the present value then results from the following formula:
Present value = g + g * q** (n-1) - 1 / (q**n-1 * (q - 1))
With payment at the end of the payment period, on the other hand, the present value is calculated as follows:
Present value = g * ( q*n - 1) / ( q*n * ( q - 1))
Example
g : 100
i: 10.000 %
n: 20
r: 3
m: 12
q: 1 + (10.000 / 100 * 3 / 12) = 1.025
Present value at the beginning of the payment period:
100 + 100 * (1.025*19 - 1) / (1.025*19 * (1.025 - 1)) = 1597.89
Present value at the end of the payment period:
100 * (1.025*20 - 1) / (1.025*20 * ( 1.025 - 1)) = 1558.92
<b>Reports</b>
There is a standard report in the system for determining future leasing liability (especially in regard to leased
assets that are not capitalized). The report displays for each leased asset:
The payments already made
The payments due up to the date of the report
The total lease payments to be made for the asset
You can create a totals list with cumulative values for each fiscal year and company code. In order for the
report to work properly, you must make sure that the following leasing conditions are properly maintained in the
asset master record:

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Start date of the lease

Payment information (lease payment amount, payment cycle, number of payments)
Leasing type
Using the APC by acquisition year indicator, you can display the theoretical acquisition value of leased assets
according to acquisition year. This statistical analysis is required in some countries for financial reports. The
system uses the base new value that is specified in the asset master record in the leasing information. The
acquisition year is determined from the start date of the lease.
<b>Implementation Considerations
General Tips</b>
If you want to manage capitalized leased assets in the system, follow these steps:
Define leasing types in Customizing for Asset Accounting with the specifications for posting asset acquisitions.
Create special asset classes and account allocations for your leased assets.
Define depreciation areas, in which you plan to capitalize leased assets using the capital lease procedure, so
that they manage interest that can be posted with the depreciation posting program.
Activate the depreciation areas, in which the leased assets will be capitalized and depreciated, in these asset
classes.
Assign a leasing type to the asset master records for leased assets.
Maintain the information and conditions of the leasing agreement in the master records of the leased assets.
Specify an interest rate for calculating the present value and determine whether the lease payments should be
made at the beginning of the payment period or at the end of the payment period.
Post the acquisition of a leased asset with the display transaction for asset master data.
<b>Leased Asset acquisition</b>
The "acquisition of a leased asset" is considered for our purposes to be the entry of the leased asset in the FIAA System. This does not necessarily mean that the leased asset must be capitalized. You can enter a leased
asset simply to manage purely statistical data. You handle the leased asset as a master record, with no values
in the book or tax depreciation areas.
Posting the acquisition of a leased asset may be necessary for one of the following reasons:
You have received a new leased asset (goods receipt).

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You need to change the way bookkeeping is handled for a leased asset due to a change in the conditions of
the lease.
You need to post a leased asset to a new asset master record due to a transfer.
<b>Process Flow</b>
Before posting the acquisition of the leased asset, you must determine the bookkeeping method to be used,
either:
Capitalization of the leased asset to fixed assets, with the present value of the future lease payments and
depreciation of the present value (capital lease)
Statistical management of the leased asset (no capitalization), and direct posting of the lease payments as
rental expense in the profit and loss statement (operating lease)

For more details.....

http://help.sap.com/saphelp_47x200/helpdata/en/4f/71fd71448011d189f00000e81ddfac/frameset.htm
If u satisfied... please assif=gn me points...
Dasharathi

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