Interaction between Lease Accounting and Asset Accounting

These are the differences between leased assets and regular assets:

• They are associated with a lease company that may be the same as the asset company and a lease number.
• They have assigned a classification that must match the Operating or Finance lease classifications.
• Operating leases can be tracked as assets, but they have to be non-depreciable or have a zero book basis.
• More than one asset can be associated with a single lease. The total basis of all the assets must match the lease obligation that is calculated on the Classification test.
• You cannot change the book basis of a leased asset. If a lease is retired, then the associated asset becomes a non-leased asset.

  See the Asset Accounting User Guide to adjust an asset.