Interaction between Lease Management and Asset Management

Leased assets differ from regular assets in these ways:

  • They are associated with a lease 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 by the FAS 13 test.

  • You cannot change the book basis of a leased asset. If a lease is retired, then the associated asset is a non-leased asset.

    You can adjust the asset as described in Asset Management User Guide

Leased asset adjustment, transfer, or disposal

If you cannot change the book basis of a leased asset, then you can adjust and transfer a leased asset similar to a non-leased asset. See the Asset Management User Guide.

If you are disposing of an asset because the lease on the asset is terminating, then you must first close the lease and dispose of the asset. See the Asset Management User Guide.

If you are adjusting an asset because you are buying the asset and terminating the lease early, then you must first retire the lease and adjust the asset.