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ELA: The Lease Obligation Account is Not Cleared on Expiring an Operating Lease That is Transitioned From Old Accounting( ASC 840) to New Accounting Standards(ASC 842). (Doc ID 2995779.1)

Last updated on JANUARY 03, 2024

Applies to:

PeopleSoft Enterprise FIN Lease Administration - Version 9.2 to 9.2 [Release 9]
Information in this document applies to any platform.

Symptoms

An operating lease is created using the Lease Administration module on ASC 840 standards and this Operating lease is transitioned to a new accounting standard ASC 842.

On new accounting standards, the Operating lease is expired and the leased asset is retired, upon processing the accounting entries, it was observed that the Lease Obligation (LO) account is not cleared.

Steps to replicate:

1) Ensure that new accounting standards are not selected on the Lease installation options page.
      Menu > Set Up Financials/Supply Chain > Install > Installation Options > Lease Administration 

2) Create a new operating lease.
     Menu > Lease Administration > Payable Leases > Create a new Payable Lease.

3) Add a base rent to be paid in advance payment mode at the first of the month.

4) Add Leased asset information and activate the lease.

5) Use the delivered migration and transition activity guide and transition this lease to new accounting standards.

6) Calculate depreciation.
      Menu > Asset Management > Depreciation > Processing > Add/Update Depreciation.

7) Create accounting entries and run the depreciation close process for some periods.
      Menu > Asset Management > Accounting Entries> Create Accounting Entries.
      Menu > Asset Management > Accounting Entries> Close Depreciation. 

8) Now Search for the transitioned lease and add an amendment to early terminate the lease.
      Menu > Lease Administration > Payable Leases > Maintain Payable Lease. 

9) Activate the amendment.

10) Expire the lease and dispose of the underlined lease asset.

11) Now process accounting entries and close the depreciation process.
      Menu > Asset Management > Accounting Entries> Create Accounting Entries.
      Menu > Asset Management > Accounting Entries> Close Depreciation.

It was observed that the LO Account is not cleared.

Changes

 

Cause

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In this Document
Symptoms
Changes
Cause
Solution
References


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